Maryland 2025 Regular Session

Maryland House Bill HB498 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb0498
6	6
7	7	HOUSE BILL 498
8	8	C8, Q3, F5 5lr0457
9	9	CF SB 427
10	10	By: The Speaker (By Request – Administration) and Delegates Allen, Cardin,
11	11	Fennell, Hornberger, Patterson, Stein, Taveras, Turner, Vogel, and Wu
12	12	Introduced and read first time: January 22, 2025
13	13	Assigned to: Ways and Means and Appropriations
14	14
15	15	A BILL ENTITLED
16	16
17	17	AN ACT concerning 1
18	18
19	19	Economic Development – Delivering Economic Competitiveness and Advancing 2
20	20	Development Efforts (DECADE) Act 3
21	21
22	22	FOR the purpose of requiring the Department of Commerce to evaluate the potential 4
23	23	employment and economic growth of the State’s industry sectors and establish a 5
24	24	certain list of industry sectors and activities; repealing the Maryland Economic 6
25	25	Development Commission and Commerce Subcabinet; altering and staggering the 7
26	26	terms of certain appointed members of the Maryland Life Sciences Advisory Board 8
27	27	in a certain manner; altering the designation, administration, and purposes of and 9
28	28	eligibility for certain economic development programs; altering the definition of 10
29	29	“MEDCO obligation” under the Tax Increment Financing Act to include certain 11
30	30	projects under the Build Our Future Program; altering the purposes for which 12
31	31	certain bond proceeds may be used under the Tax Increment Financing Act; 13
32	32	requiring the State Department of Assessments and Taxation to waive certain filing 14
33	33	fees for certain businesses located within a Regional Institution Strategic Enterprise 15
34	34	zone; altering eligibility for, terms of, and types of financial assistance from the Child 16
35	35	Care Capital Support Revolving Loan Fund; altering the purposes of the Seed 17
36	36	Community Development Anchor Institution Fund to include providing certain 18
37	37	financial assistance for projects in certain RISE zone catchment areas and requiring 19
38	38	the Department of Housing and Community Development to prioritize certain 20
39	39	applications located in active RISE zones; redesignating the Economic Development 21
40	40	Opportunities Program Account to be the Strategic Closing Fund within the 22
41	41	Department of Commerce; altering the purposes for and methods by which the 23
42	42	Strategic Closing Fund may be utilized; altering the distribution of certain video 24
43	43	lottery terminal proceeds; altering the termination date of the Build Our Future 25
44	44	Grant Pilot Program and Job Creation Tax Credit, Research and Development Tax 26
45	45	Credit, and Innovation Investment Incentive Tax Credit programs; providing for the 27
46	46	termination of the One Maryland Economic Development Tax Credit Program on a 28
47	47	certain date; altering eligibility for and the calculation of certain tax credits; allowing 29 2 HOUSE BILL 498
48	48
49	49
50	50	a qualified investor that is a pass–through entity that pays a certain income tax on 1
51	51	behalf of its members to receive and allocate in any manner a credit or refund of a 2
52	52	credit under the Biotechnology Investment Incentive Tax Credit and Innovation 3
53	53	Investment Incentive Tax Credit programs; altering the aggregate amount of film 4
54	54	production activity tax credit certificates that the Secretary of Commerce may issue 5
55	55	each fiscal year; repealing a certain limit on the aggregate amount of tax credit 6
56	56	certificates the Secretary may issue for a single film production activity; repealing a 7
57	57	credit against the State income tax for certain costs related to federal security 8
58	58	clearances; and generally relating to economic development and economic 9
59	59	development incentives. 10
60	60
61	61	BY renumbering 11
62	62	Article – Economic Development 12
63	63	Section 5–1401 through 5–1410 and the subtitle “Subtitle 14. Regional Institution 13
64	64	Strategic Enterprise Zone Program”; and 5–2301 through 5–2307 and the 14
65	65	subtitle “Subtitle 23. Build Our Future Grant Pilot Program” 15
66	66	to be Section 10–137 through 10–146 and the part “Part II. Regional Institution 16
67	67	Strategic Enterprise Zone Program”; and 10–149 through 10–155 and the part 17
68	68	“Part III. Build Our Future Grant Pilot Program”, respectively 18
69	69	Annotated Code of Maryland 19
70	70	(2024 Replacement Volume and 2024 Supplement) 20
71	71
72	72	BY repealing and reenacting, with amendments, 21
73	73	Article – Economic Development 22
74	74	Section 2–113, 2–116, 2.5–106, 3–203, 3–401, 3–402, 3–411, 5–102, and 5–205; 23
75	75	5–301 to be under the amended subtitle “Subtitle 3. Maryland Economic 24
76	76	Competitiveness Fund”; 5–310 to be under the amended part “Part III. 25
77	77	Maryland Economic Competitiveness Fund”; 5–319 through 5–321, 5–324, 26
78	78	5–325, 5–329, and 5–338(d); 5–501 to be under the amended subtitle “Subtitle 27
79	79	5. Maryland Economic Inclusion Fund”; 5–502; 5–505 to be under the 28
80	80	amended part “Part II. Maryland Economic Inclusion Fund”; 5–517 to be 29
81	81	under the amended part “Part III. Small Business Development Contract 30
82	82	Financing Program”; 5–518, 5–524 through 5–528, and 5–530; 5–533 to be 31
83	83	under the amended part “Part IV. Small Business Development Guaranty 32
84	84	Program”; 5–534, 5–539 through 5–543, 5–545, 5–546, 5–549 through 5–551, 33
85	85	5–553, 5–555 through 5–558, 5–561, 5–562, 5–566 through 5–575, 5–1001, 34
86	86	5–1002, 5–1006, and 5–1204(a)(1)(ii)4.; 5–1501(a) to be under the amended 35
87	87	subtitle “Subtitle 15. Reinvest for Success Account”; and 5–2402, 6–309, 36
88	88	6–601, 6–604, 6–614, 6–1007, 10–115, 10–133, 10–408(a), 10–415, 10–470, 37
89	89	10–528, 12–201(k) and (p), 12–207(b) and (e), and 16–102(d)(2) 38
90	90	Annotated Code of Maryland 39
91	91	(2024 Replacement Volume and 2024 Supplement) 40
92	92
93	93	BY repealing 41
94	94	Article – Economic Development 42
95	95	Section 2.5–201 through 2.5–207 and the subtitle “Subtitle 2. Maryland Economic 43
96	96	Development Commission”; 3–408 through 3–410; 5–305 through 5–307 and 44 HOUSE BILL 498 3
97	97
98	98
99	99	the part “Part II. Maryland Economic Development Assistance Authority”; 1
100	100	and 5–506 through 5–514, 5–519 through 5–523, 5–529, 5–535 through 5–538, 2
101	101	5–544, 5–552, 5–554, 5–559, 5–563 through 5–565, 5–1003 through 5–1005, 3
102	102	and 5–1007 4
103	103	Annotated Code of Maryland 5
104	104	(2024 Replacement Volume and 2024 Supplement) 6
105	105
106	106	BY repealing and reenacting, without amendments, 7
107	107	Article – Economic Development 8
108	108	Section 3–201, 3–202, 3–403, 5–201, 5–203, 5–311 through 5–316, 5–322, 5–323, 9
109	109	5–401(a), (b), and (p), 5–2401, 10–101(a), (b), and (d), 10–401(a) and (c), 10
110	110	10–501(a) and (f), 12–201(a), and 12–207(a) 11
111	111	Annotated Code of Maryland 12
112	112	(2024 Replacement Volume and 2024 Supplement) 13
113	113
114	114	BY adding to 14
115	115	Article – Economic Development 15
116	116	Section 5–464, 5–506 through 5–508, and 6–407; and the new part designation “Part 16
117	117	I. Maryland Economic Development Corporation” to immediately precede 17
118	118	Section 10–101 18
119	119	Annotated Code of Maryland 19
120	120	(2024 Replacement Volume and 2024 Supplement) 20
121	121
122	122	BY repealing and reenacting, with amendments, 21
123	123	Article – Economic Development 22
124	124	Section 10–137, 10–139 through 10–146, 10–149(a), and 10–150 through 10–155 23
125	125	Annotated Code of Maryland 24
126	126	(2024 Replacement Volume and 2024 Supplement) 25
127	127	(As enacted by Section 1 of this Act) 26
128	128
129	129	BY repealing and reenacting, without amendments, 27
130	130	Article – Economic Development 28
131	131	Section 10–138 29
132	132	Annotated Code of Maryland 30
133	133	(2024 Replacement Volume and 2024 Supplement) 31
134	134	(As enacted by Section 1 of this Act) 32
135	135
136	136	BY adding to 33
137	137	Article – Corporations and Associations 34
138	138	Section 1–203(b)(14) 35
139	139	Annotated Code of Maryland 36
140	140	(2014 Replacement Volume and 2024 Supplement) 37
141	141
142	142	BY repealing and reenacting, with amendments, 38
143	143	Article – Corporations and Associations 39
144	144	Section 1–203(b)(14) 40
145	145	Annotated Code of Maryland 41 4 HOUSE BILL 498
146	146
147	147
148	148	(2014 Replacement Volume and 2024 Supplement) 1
149	149
150	150	BY repealing and reenacting, with amendments, 2
151	151	Article – Education 3
152	152	Section 9.5–113.1 4
153	153	Annotated Code of Maryland 5
154	154	(2022 Replacement Volume and 2024 Supplement) 6
155	155
156	156	BY repealing and reenacting, with amendments, 7
157	157	Article – Housing and Community Development 8
158	158	Section 4–509, 6–404, and 6.5–107(e)(2) 9
159	159	Annotated Code of Maryland 10
160	160	(2019 Replacement Volume and 2024 Supplement) 11
161	161
162	162	BY repealing and reenacting, with amendments, 12
163	163	Article – State Finance and Procurement 13
164	164	Section 7–314 14
165	165	Annotated Code of Maryland 15
166	166	(2021 Replacement Volume and 2024 Supplement) 16
167	167
168	168	BY repealing and reenacting, with amendments, 17
169	169	Article – State Government 18
170	170	Section 9–1A–26(c)(2)(i) and 9–1A–27(a)(6) and (c)(1)(v)1. 19
171	171	Annotated Code of Maryland 20
172	172	(2021 Replacement Volume and 2024 Supplement) 21
173	173
174	174	BY repealing 22
175	175	Article – State Government 23
176	176	Section 9–3101 through 9–3104 and the subtitle “Subtitle 31. Commerce Subcabinet” 24
177	177	Annotated Code of Maryland 25
178	178	(2021 Replacement Volume and 2024 Supplement) 26
179	179
180	180	BY repealing and reenacting, without amendments, 27
181	181	Article – Tax – Property 28
182	182	Section 9–103.1(a)(1) 29
183	183	Annotated Code of Maryland 30
184	184	(2019 Replacement Volume and 2024 Supplement) 31
185	185
186	186	BY repealing and reenacting, with amendments, 32
187	187	Article – Tax – Property 33
188	188	Section 9–103.1(a)(7), (c)(6)(i), (e), and (f) and 9–229(c)(2) and (g) 34
189	189	Annotated Code of Maryland 35
190	190	(2019 Replacement Volume and 2024 Supplement) 36
191	191
192	192	BY repealing and reenacting, with amendments, 37
193	193	Chapter 430 of the Acts of the General Assembly of 2023 38
194	194	Section 3 39 HOUSE BILL 498 5
195	195
196	196
197	197
198	198	BY repealing and reenacting, with amendments, 1
199	199	Chapter 431 of the Acts of the General Assembly of 2023 2
200	200	Section 3 3
201	201
202	202	BY repealing and reenacting, without amendments, 4
203	203	Article – Tax – General 5
204	204	Section 10–702(a)(1), 10–725(a) and (b)(2), 10–730(a)(1), (4), and (7) and (b), and 6
205	205	10–733(a) and (b)(2) and (3)(ii)2.J. 7
206	206	Annotated Code of Maryland 8
207	207	(2022 Replacement Volume and 2024 Supplement) 9
208	208
209	209	BY repealing and reenacting, with amendments, 10
210	210	Article – Tax – General 11
211	211	Section 10–702(a)(4)(ii), 10–721, 10–725(d), 10–730(f), 10–733(b)(4) and (d), and 12
212	212	10–733.1 13
213	213	Annotated Code of Maryland 14
214	214	(2022 Replacement Volume and 2024 Supplement) 15
215	215
216	216	BY adding to 16
217	217	Article – Tax – General 17
218	218	Section 10–725(b)(5) and 10–733(b)(5) and (j) 18
219	219	Annotated Code of Maryland 19
220	220	(2022 Replacement Volume and 2024 Supplement) 20
221	221
222	222	BY repealing 21
223	223	Article – Tax – General 22
224	224	Section 10–732 23
225	225	Annotated Code of Maryland 24
226	226	(2022 Replacement Volume and 2024 Supplement) 25
227	227
228	228	BY repealing and reenacting, with amendments, 26
229	229	Chapter 515 of the Acts of the General Assembly of 2000, as amended by Chapter 98 27
230	230	of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 28
231	231	General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 29
232	232	2019, and Chapter 114 of the Acts of the General Assembly of 2021 30
233	233	Section 2 and 4 31
234	234
235	235	BY repealing and reenacting, with amendments, 32
236	236	Chapter 516 of the Acts of the General Assembly of 2000, as amended by Chapter 98 33
237	237	of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 34
238	238	General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 35
239	239	2019, and Chapter 114 of the Acts of the General Assembly of 2021 36
240	240	Section 2 and 4 37
241	241
242	242	BY repealing and reenacting, with amendments, 38
243	243	Chapter 390 of the Acts of the General Assembly of 2013, as amended by Chapter 39 6 HOUSE BILL 498
244	244
245	245
246	246	578 of the Acts of the General Assembly of 2018 and Chapter 113 of the Acts 1
247	247	of the General Assembly of 2021 2
248	248	Section 2 3
249	249
250	250	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
251	251	That Section(s) 5–1401 through 5–1410 and the subtitle “Subtitle 14. Regional Institution 5
252	252	Strategic Enterprise Zone Program”; and 5–2301 through 5–2307 and the subtitle “Subtitle 6
253	253	23. Build Our Future Grant Pilot Program” of Article – Economic Development of the 7
254	254	Annotated Code of Maryland be renumbered to be Section(s) 10–137 through 10–146 and 8
255	255	the part “Part II. Regional Institution Strategic Enterprise Zone Program”; and 10–149 9
256	256	through 10–155 and the part “Part III. Build Our Future Grant Pilot Program”, 10
257	257	respectively. 11
258	258
259	259	SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 12
260	260	as follows: 13
261	261
262	262	Article – Economic Development 14
263	263
264	264	2–113. 15
265	265
266	266	[(a) This section does not apply to a power, duty, responsibility, or function that is 16
267	267	granted to the Maryland Economic Development Commission under Subtitle 2 of this title. 17
268	268
269	269	(b)] The Secretary may exercise any power, duty, responsibility, or function of any 18
270	270	unit under the jurisdiction of the Department. 19
271	271
272	272	2–116. 20
273	273
274	274	(a) This section does not apply to a unit under the jurisdiction of the Department 21
275	275	to the extent that the unit is authorized by law to employ its own legal counsel. 22
276	276
277	277	(b) The Attorney General is the legal adviser to the Department. 23
278	278
279	279	(c) The Attorney General shall assign to the Department the number of assistant 24
280	280	Attorneys General that are authorized by law for the Department and its units. 25
281	281
282	282	(d) (1) The Attorney General shall designate one of the assistant Attorneys 26
283	283	General assigned to the Department as counsel to the Department and may not reassign 27
284	284	that individual without consulting with the Secretary. 28
285	285
286	286	(2) The counsel may only: 29
287	287
288	288	(i) advise the Secretary[, the Maryland Economic Development 30
289	289	Commission,] and any other official of the Department as they require; 31
290	290
291	291	(ii) supervise the other assistant Attorneys General assigned to the 32
292	292	Department; and 33 HOUSE BILL 498 7
293	293
294	294
295	295
296	296	(iii) perform for the Department the other duties that the Attorney 1
297	297	General assigns. 2
298	298
299	299	(3) The other assistant Attorneys General shall perform for the 3
300	300	Department the other duties that the Attorney General assigns. 4
301	301
302	302	2.5–106. 5
303	303
304	304	The Department shall: 6
305	305
306	306	(1) investigate and assemble information about the economic development, 7
307	307	industrial opportunities, and economic resources of the State, including raw materials, 8
308	308	power and water resources, transportation facilities, markets, labor, banking and financing 9
309	309	facilities, industrial sites, and other fields of research; 10
310	310
311	311	(2) encourage location and development of new businesses in the State and 11
312	312	the retention and expansion of present enterprises in coordination with local governments 12
313	313	and local economic development units; 13
314	314
315	315	(3) encourage formation of local and sectional development committees and 14
316	316	cooperate with local civic groups and other local, State, and federal development units; 15
317	317
318	318	(4) disseminate information in the interest of industrial development in the 16
319	319	State, by publication, advertising, and other means; 17
320	320
321	321	(5) assist businesses in the areas of technology development and 18
322	322	commercialization, small business development, workforce development and productivity, 19
323	323	manufacturing modernization, and defense conversion; 20
324	324
325	325	(6) serve as an ombudsman for businesses affected by State policies and 21
326	326	programs; 22
327	327
328	328	(7) coordinate business assistance service delivery to individual companies; 23
329	329
330	330	(8) link groups of businesses to address regional and industry specific 24
331	331	needs; 25
332	332
333	333	(9) broker information exchange and entrepreneurial services that 26
334	334	enhance economic development through partnerships with businesses, nonprofit 27
335	335	organizations, professional groups, local economic development entities, and local 28
336	336	governments; 29
337	337
338	338	(10) assist in developing and conducting regional strategic planning and 30
339	339	coordinating State investments with regional economic development entities; 31
340	340
341	341	(11) collect and assemble information and data available from other State 32 8 HOUSE BILL 498
342	342
343	343
344	344	units or instrumentalities; 1
345	345
346	346	(12) monitor economic conditions, release reports, and maintain 2
347	347	interindustry models of State regulations and local economies; 3
348	348
349	349	[(13) use community colleges in the State to help deliver services;] 4
350	350
351	351	[(14)] (13) administer the programs in the Department; 5
352	352
353	353	[(15)] (14) coordinate its efforts and activities with the Apprenticeship and 6
354	354	Training Council and Apprenticeship and Training Program in the Maryland Department 7
355	355	of Labor; 8
356	356
357	357	[(16)] (15) establish and monitor performance measures to determine the 9
358	358	success of outreach efforts to businesses; 10
359	359
360	360	[(17)] (16) facilitate regular meetings among its regional experts, financial 11
361	361	incentive team, and tourism development team to determine the success in meeting overall 12
362	362	economic development strategic goals and in addressing the economic development needs 13
363	363	of each region; 14
364	364
365	365	[(18)] (17) work with community colleges to enhance the role of community 15
366	366	colleges in providing workforce training services, including industry–specific education and 16
367	367	training in response to the needs of the State; [and] 17
368	368
369	369	[(19)] (18) (i) define, identify, and compile data on State and regional 18
370	370	workforce needs; and 19
371	371
372	372	(ii) work collaboratively with the Maryland Department of Labor 20
373	373	and the Maryland Higher Education Commission to produce uniform and consistent 21
374	374	baseline data, including common sources and measurements, about workforce needs to 22
375	375	inform State policies relating to postsecondary education; AND 23
376	376
377	377	(19) EVALUATE THE POTENTI AL EMPLOYMENT AND EC ONOMIC 24
378	378	GROWTH OF MARYLAND’S INDUSTRY SECTORS A ND, FROM THIS EVALUATION : 25
379	379
380	380	(I) ESTABLISH A LIST OF INDUSTRY SECTORS AND ACTIVITIES 26
381	381	TO BE CONSIDERED FOR ADDITIONAL INVESTMEN T AND SUPPORT FROM T HE 27
382	382	DEPARTMENT ; 28
383	383
384	384	(II) RECOMMEND OTHER AGEN CIES CONSIDER PRIORI TIZING 29
385	385	THE SECTORS AND ACTI VITIES ON THE LIST D ESCRIBED UNDER ITEM (I) OF THIS 30
386	386	ITEM THROUGH THOSE A GENCIES’ POLICIES AND PROGRAM S; AND 31
387	387
388	388	(III) PUBLISH THE LIST DESCRIBED UNDER ITEM (I) OF THIS 32 HOUSE BILL 498 9
389	389
390	390
391	391	ITEM ON THE DEPARTMENT ’S WEBSITE. 1
392	392
393	393	[Subtitle 2. Maryland Economic Development Commission.] 2
394	394
395	395	[2.5–201. 3
396	396
397	397	In this subtitle, “Commission” means the Maryland Economic Development 4
398	398	Commission.] 5
399	399
400	400	[2.5–202. 6
401	401
402	402	(a) There is a Maryland Economic Development Commission staffed by the 7
403	403	Department. 8
404	404
405	405	(b) The purpose of the Commission is to: 9
406	406
407	407	(1) establish economic development policy in the State; 10
408	408
409	409	(2) advise the Secretary on economic development policy in the State; 11
410	410
411	411	(3) oversee the operations of the Department and its units, including the 12
412	412	Department’s efforts to support the creation of, attract, and retain businesses and jobs; and 13
413	413
414	414	(4) monitor the operations of the Maryland Technology Development 14
415	415	Corporation, the Maryland Economic Development Corporation, and the Maryland 15
416	416	Public–Private Partnership Marketing Corporation, including the efforts of those entities 16
417	417	to support the creation, attraction, and retention of businesses and jobs.] 17
418	418
419	419	[2.5–203. 18
420	420
421	421	(a) (1) (i) The Commission consists of: 19
422	422
423	423	1. not more than 21 voting members appointed by the 20
424	424	Governor with the advice and consent of the Senate; 21
425	425
426	426	2. two voting members appointed by the President of the 22
427	427	Senate of Maryland; 23
428	428
429	429	3. two voting members appointed by the Speaker of the 24
430	430	House of Delegates; 25
431	431
432	432	4. A. one member of the Senate of Maryland, designated 26
433	433	by the President of the Senate; and 27
434	434
435	435	B. one member of the House of Delegates, designated by the 28
436	436	Speaker of the House; and 29 10 HOUSE BILL 498
437	437
438	438
439	439
440	440	5. the following representatives of State units and 1
441	441	instrumentalities of the State: 2
442	442
443	443	A. the Executive Director of the Maryland Economic 3
444	444	Development Corporation, or the Executive Director’s designee; 4
445	445
446	446	B. the Chief Executive Officer of the Maryland Technology 5
447	447	Development Corporation, or the Chief Executive Officer’s designee; 6
448	448
449	449	C. the Secretary or the Secretary’s designee; and 7
450	450
451	451	D. the Secretary of Labor, or the Secretary’s designee. 8
452	452
453	453	(ii) The Secretary and the Secretary of Labor or their designees, 9
454	454	State unit or instrumentality representatives, and members of the General Assembly are 10
455	455	nonvoting ex officio members of the Commission. 11
456	456
457	457	(iii) A designee under subparagraph (i)5 of this paragraph may be an 12
458	458	administrator or a senior official of the unit or instrumentality. 13
459	459
460	460	(2) The geographic representation of the Commission shall cover the entire 14
461	461	State and shall include at least one representative from: 15
462	462
463	463	(i) the upper Eastern Shore; 16
464	464
465	465	(ii) the lower Eastern Shore; 17
466	466
467	467	(iii) Calvert County, Charles County, or St. Mary’s County; 18
468	468
469	469	(iv) Allegany County or Garrett County; and 19
470	470
471	471	(v) Carroll County, Frederick County, or Washington County. 20
472	472
473	473	(3) The industries represented by the members of the Commission shall: 21
474	474
475	475	(i) be diverse; and 22
476	476
477	477	(ii) include at least one representative from: 23
478	478
479	479	1. the life sciences industry; and 24
480	480
481	481	2. the manufacturing industry. 25
482	482
483	483	(4) The members appointed shall reflect the racial and gender diversity of 26
484	484	the population of the State. 27
485	485	HOUSE BILL 498 11
486	486
487	487
488	488	(b) The appointed members of the Commission shall have substantial interest or 1
489	489	experience in business or knowledge of business and economic development. 2
490	490
491	491	(c) The Commission and its members are subject to the Maryland Public Ethics 3
492	492	Law. 4
493	493
494	494	(d) (1) The term of an appointed member is 3 years. 5
495	495
496	496	(2) At the end of a term, an appointed member continues to serve until a 6
497	497	successor is appointed and qualifies. 7
498	498
499	499	(3) A member appointed after a term has begun serves only for the 8
500	500	remainder of the term and until a successor is appointed and qualifies. 9
501	501
502	502	(4) The terms of the appointed members are staggered as required by the 10
503	503	terms provided for members of the Commission on October 1, 2008. 11
504	504
505	505	(5) A member may be removed by the Governor with or without cause.] 12
506	506
507	507	[2.5–204. 13
508	508
509	509	(a) The Governor shall designate a chair or cochairs from the voting members of 14
510	510	the Commission. 15
511	511
512	512	(b) The Commission may elect an executive committee or form special 16
513	513	subcommittees from its members to exercise the powers and functions of the Commission 17
514	514	between meetings of the Commission.] 18
515	515
516	516	[2.5–205. 19
517	517
518	518	(a) (1) The Commission shall meet as often as its duties require, but not less 20
519	519	than quarterly. 21
520	520
521	521	(2) The chair or cochairs shall designate a time and place for meetings of 22
522	522	the Commission. 23
523	523
524	524	(b) A majority of the voting members of the Commission is a quorum. 24
525	525
526	526	(c) A voting member of the Commission: 25
527	527
528	528	(1) may not receive compensation as a member of the Commission; but 26
529	529
530	530	(2) is entitled to reimbursement in accordance with the Standard State 27
531	531	Travel Regulations as provided in the State budget. 28
532	532
533	533	(d) The Department shall provide staff support to the Commission.] 29 12 HOUSE BILL 498
534	534
535	535
536	536
537	537	[2.5–206. 1
538	538
539	539	(a) The Commission may: 2
540	540
541	541	(1) adopt bylaws for the conduct of its business; 3
542	542
543	543	(2) hire consultants; and 4
544	544
545	545	(3) do anything necessary or convenient to carry out its powers and the 5
546	546	purposes of this subtitle. 6
547	547
548	548	(b) The Commission shall: 7
549	549
550	550	(1) develop and update an economic development strategic plan for the 8
551	551	State; 9
552	552
553	553	(2) seek ideas and advice from each region of the State to develop the 10
554	554	economic development strategic plan; 11
555	555
556	556	(3) recommend to the Governor and the Secretary the program and 12
557	557	spending priorities needed to implement the economic development strategic plan; 13
558	558
559	559	(4) review the allocation of financing incentives; 14
560	560
561	561	(5) participate in encouraging new businesses to locate in the State; 15
562	562
563	563	(6) conduct periodic reviews of the economic development activities of the 16
564	564	Department, the Maryland Economic Development Corporation, the Maryland Technology 17
565	565	Development Corporation, and the Maryland Public–Private Partnership Marketing 18
566	566	Corporation for compliance with the economic development strategic plan; 19
567	567
568	568	(7) make recommendations to the Governor and the Secretary to improve 20
569	569	economic development activities that fail to achieve economic development strategic goals 21
570	570	or are inconsistent with priorities under the economic development strategic plan; and 22
571	571
572	572	(8) carry out other economic development activities that the Governor or 23
573	573	the Secretary requests.] 24
574	574
575	575	[2.5–207. 25
576	576
577	577	(a) On or before January 15 of each year, the Commission shall report to the 26
578	578	General Assembly, in accordance with § 2–1257 of the State Government Article, on its 27
579	579	activities during the previous year. 28
580	580
581	581	(b) The report shall include a review of initiatives taken by the Commission and 29
582	582	the Department to implement the economic development strategic plan.] 30 HOUSE BILL 498 13
583	583
584	584
585	585
586	586	3–201. 1
587	587
588	588	(a) In this subtitle the following words have the meanings indicated. 2
589	589
590	590	(b) “Advisory Board” means the Maryland Life Sciences Advisory Board. 3
591	591
592	592	(c) “Corporation” means the Maryland Technology Development Corporation. 4
593	593
594	594	(d) “Life sciences” includes the fields of biotechnology, pharmaceuticals, 5
595	595	biomedical technologies, life systems technologies, food sciences, environmental sciences, 6
596	596	and biomedical devices. 7
597	597
598	598	3–202. 8
599	599
600	600	(a) There is a Maryland Life Sciences Advisory Board in the Department. 9
601	601
602	602	(b) The purpose of the Advisory Board is to recommend State and federal policies, 10
603	603	priorities, practices, and legislation to expedite the creation of private sector jobs through 11
604	604	the commercialization of life sciences research. 12
605	605
606	606	3–203. 13
607	607
608	608	(a) The Advisory Board consists of the following 18 members: 14
609	609
610	610	(1) the Secretary or the Secretary’s designee; 15
611	611
612	612	(2) the Executive Director of the Corporation, or the Executive Director’s 16
613	613	designee; and 17
614	614
615	615	(3) the following members appointed by the Governor: 18
616	616
617	617	(i) three representing federal agencies located in the State with life 19
618	618	sciences missions; 20
619	619
620	620	(ii) seven with executive experience in life sciences businesses 21
621	621	located in the State, at least four of whom represent small businesses; 22
622	622
623	623	(iii) four representing institutions of higher education located in the 23
624	624	State, one of whom shall represent a community college; 24
625	625
626	626	(iv) one with general business marketing experience in a life sciences 25
627	627	business located in the State; and 26
628	628
629	629	(v) one member of the general public. 27
630	630
631	631	(b) The composition of the Advisory Board shall reflect the racial and gender 28 14 HOUSE BILL 498
632	632
633	633
634	634	diversity of the population of the State. 1
635	635
636	636	(c) (1) Except for the Secretary or the Secretary’s designee and the Executive 2
637	637	Director of the Corporation or the Executive Director’s designee, the term of an Advisory 3
638	638	Board member is [2] 3 years. 4
639	639
640	640	(2) At the end of a term, a member continues to serve until a successor is 5
641	641	appointed and qualifies. 6
642	642
643	643	(3) A member who is appointed after a term has begun serves only for the 7
644	644	rest of the term and until a successor is appointed and qualifies. 8
645	645
646	646	(4) THE TERMS OF THE APPO INTED MEMBERS ARE ST AGGERED AS 9
647	647	REQUIRED BY THE TERM S PROVIDED FOR MEMBE RS OF THE ADVISORY BOARD ON 10
648	648	JULY 1, 2025. 11
649	649
650	650	(d) The Governor may remove a member of the Advisory Board for incompetence, 12
651	651	misconduct, or failure to perform the duties of the position. 13
652	652
653	653	(e) The Governor shall select a chair from among the members of the Advisory 14
654	654	Board. 15
655	655
656	656	(f) The Advisory Board may act with an affirmative vote of eight members. 16
657	657
658	658	(g) A member of the Advisory Board: 17
659	659
660	660	(1) may not receive compensation as a member of the Advisory Board; but 18
661	661
662	662	(2) is entitled to reimbursement for expenses under the Standard State 19
663	663	Travel Regulations, as provided in the State budget. 20
664	664
665	665	3–401. 21
666	666
667	667	(a) In this subtitle the following words have the meanings indicated. 22
668	668
669	669	[(b) “Board” means the Partnership for Workforce Quality Advisory Board.] 23
670	670
671	671	[(c)] (B) “Fund” means the [Partnership for Workforce Quality] TALENT 24
672	672	ACCELERATOR GRANT Fund. 25
673	673
674	674	[(d)] (C) “Program” means the [Partnership for Workforce Quality] TALENT 26
675	675	ACCELERATOR GRANT Program. 27
676	676
677	677	3–402. 28
678	678
679	679	There is a [Partnership for Workforce Quality] TALENT ACCELERATOR GRANT 29 HOUSE BILL 498 15
680	680
681	681
682	682	Program in the Department. 1
683	683
684	684	3–403. 2
685	685
686	686	The purpose of the Program is to provide training services to: 3
687	687
688	688	(1) improve the competitiveness and productivity of the State’s workforce 4
689	689	and business community; 5
690	690
691	691	(2) upgrade employee skills, or train new employees, for new technologies 6
692	692	or production processes; and 7
693	693
694	694	(3) assist employers located in the State in promoting employment 8
695	695	stability. 9
696	696
697	697	[3–408. 10
698	698
699	699	(a) There is a Partnership for Workforce Quality Advisory Board in the 11
700	700	Department. 12
701	701
702	702	(b) The Board shall advise the Secretary.] 13
703	703
704	704	[3–409. 14
705	705
706	706	(a) The Board consists of the following 15 members: 15
707	707
708	708	(1) one member of the Senate of Maryland appointed by the President of 16
709	709	the Senate; 17
710	710
711	711	(2) one member of the House of Delegates appointed by the Speaker of the 18
712	712	House; and 19
713	713
714	714	(3) the following members appointed by the Governor with the advice of 20
715	715	the Secretary and the chair of the Governor’s Workforce Development Board: 21
716	716
717	717	(i) five representatives of business, of which three shall represent 22
718	718	employers with fewer than 100 employees; 23
719	719
720	720	(ii) three representatives of organized labor; 24
721	721
722	722	(iii) one representative from the Maryland Higher Education 25
723	723	Commission; 26
724	724
725	725	(iv) one representative from the State Department of Education; 27
726	726
727	727	(v) one representative from the Governor’s Workforce Development 28
728	728	Board; and 29 16 HOUSE BILL 498
729	729
730	730
731	731
732	732	(vi) two representatives of the general public. 1
733	733
734	734	(b) (1) The term of a member appointed under subsection (a)(3) of this section 2
735	735	is 3 years. 3
736	736
737	737	(2) The terms of the members appointed under subsection (a)(3) of this 4
738	738	section are staggered as required by the terms provided for members of the Board on 5
739	739	October 1, 2008. 6
740	740
741	741	(3) At the end of a term, a member continues to serve until a successor is 7
742	742	appointed and qualifies. 8
743	743
744	744	(4) A member who is appointed after a term has begun serves only for the 9
745	745	rest of the term and until a successor is appointed and qualifies. 10
746	746
747	747	(c) A member of the Board: 11
748	748
749	749	(1) may not receive compensation as a member of the Board; but 12
750	750
751	751	(2) is entitled to reimbursement for expenses under the Standard State 13
752	752	Travel Regulations. 14
753	753
754	754	(d) The Governor shall designate the chair of the Board.] 15
755	755
756	756	[3–410. 16
757	757
758	758	(a) The Board shall: 17
759	759
760	760	(1) submit recommendations to the Secretary concerning overall policy for 18
761	761	the Program; 19
762	762
763	763	(2) recommend a system to evaluate requests for assistance under the 20
764	764	Program, including eligibility criteria and priorities for assistance; 21
765	765
766	766	(3) develop criteria to assess and evaluate Program performance and 22
767	767	advise the Secretary of the criteria; 23
768	768
769	769	(4) consult regularly with the Governor’s Workforce Development Board 24
770	770	and the Maryland Economic Development Commission concerning the activities of the 25
771	771	Program; 26
772	772
773	773	(5) submit a quarterly report on the Program to the Governor’s Workforce 27
774	774	Development Board; and 28
775	775
776	776	(6) advise the Secretary on coordination of cooperative activities at the 29
777	777	State and local level between the Department, employers, labor, and other public and 30 HOUSE BILL 498 17
778	778
779	779
780	780	private entities involved with workforce quality. 1
781	781
782	782	(b) In recommending a system for evaluating requests for assistance, the Board 2
783	783	shall consider the equal distribution of assistance to all subdivisions of the State.] 3
784	784
785	785	3–411. 4
786	786
787	787	(a) There is a [Partnership for Workforce Quality] TALENT ACCELERATOR 5
788	788	GRANT Fund in the Department. 6
789	789
790	790	(b) The Secretary shall manage and supervise the Fund. 7
791	791
792	792	(c) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 8
793	793	under § 7–302 of the State Finance and Procurement Article. 9
794	794
795	795	(2) The Treasurer shall hold the Fund separately and the Comptroller shall 10
796	796	account for the Fund. 11
797	797
798	798	(d) The Fund consists of: 12
799	799
800	800	(1) money appropriated by the State to the Fund; 13
801	801
802	802	(2) money made available to the Fund through federal programs; 14
803	803
804	804	(3) private contributions to the Fund; 15
805	805
806	806	(4) an application or other fee paid to the Program in connection with 16
807	807	processing a request for financial assistance; and 17
808	808
809	809	(5) any other money made available to the Fund. 18
810	810
811	811	(e) The Department may use money in the Fund for: 19
812	812
813	813	(1) grants to defray the cost of workforce training; and 20
814	814
815	815	(2) administrative, actuarial, legal, and technical services for the Program. 21
816	816
817	817	(f) Any investment earnings shall be credited to the Fund. 22
818	818
819	819	(g) The Governor shall include in the State budget for each fiscal year an 23
820	820	appropriation of at least $1,000,000 for the [Partnership for Workforce Quality] TALENT 24
821	821	ACCELERATOR GRANT Program. 25
822	822
823	823	5–102. 26
824	824
825	825	The Department shall administer the State’s economic development and financial 27 18 HOUSE BILL 498
826	826
827	827
828	828	assistance programs and funds including: 1
829	829
830	830	(1) the BRAC Revitalization and Incentive Zone Program, under Subtitle 2
831	831	13 of this title; 3
832	832
833	833	(2) [the Build Our Future Grant Pilot Program, under Subtitle 23 of this 4
834	834	title; 5
835	835
836	836	(3)] the Enterprise Fund, under Subtitle 6 of this title; 6
837	837
838	838	[(4)] (3) the Enterprise Zones Program, under Subtitle 7 of this title; 7
839	839
840	840	[(5)] (4) the Make Office Vacancies Extinct Program, under Subtitle 15 of 8
841	841	this title; 9
842	842
843	843	[(6)] (5) the Maryland Economic Adjustment Fund, under Subtitle 2 of 10
844	844	this title; 11
845	845
846	846	[(7)] (6) the Maryland Economic [Development Assistance Authority 12
847	847	and] COMPETITIVENESS Fund, under Subtitle 3 of this title; 13
848	848
849	849	[(8)] (7) the Maryland Industrial Development Financing Authority, 14
850	850	under Subtitle 4 of this title; 15
851	851
852	852	[(9)] (8) the Maryland [Small Business Development Financing 16
853	853	Authority] ECONOMIC INCLUSION FUND, under Subtitle 5 of this title; 17
854	854
855	855	[(10)] (9) the Appalachian Regional Development Program, under Title 13, 18
856	856	Subtitle 1 of this article; 19
857	857
858	858	[(11)] (10) jointly with the Department of Housing and Community 20
859	859	Development, the Community Development Block Grant for Economic Development; AND 21
860	860
861	861	[(12) the Regional Institution Strategic Enterprise Zone Program under 22
862	862	Subtitle 14 of this title; and 23
863	863
864	864	(13)] (11) any other programs or funds designated by statute, the 24
865	865	Governor, or the Secretary. 25
866	866
867	867	5–201. 26
868	868
869	869	(a) In this subtitle the following words have the meanings indicated. 27
870	870
871	871	(b) “Fund” means the Maryland Economic Adjustment Fund. 28
872	872
873	873	(c) (1) “Working capital” means money for current operations of a business. 29 HOUSE BILL 498 19
874	874
875	875
876	876
877	877	(2) “Working capital” includes money for supplies, materials, labor, 1
878	878	equipment, rent, software, marketing, insurance, and fees for professional services. 2
879	879
880	880	5–203. 3
881	881
882	882	(a) There is a Maryland Economic Adjustment Fund in the Department. 4
883	883
884	884	(b) (1) The Department shall administer the Fund. 5
885	885
886	886	(2) The Secretary may: 6
887	887
888	888	(i) delegate to any unit in the Department the underwriting, closing, 7
889	889	monitoring, and workout functions for Fund loans; or 8
890	890
891	891	(ii) contract with another entity to perform these functions. 9
892	892
893	893	(c) The Maryland Economic Adjustment Fund is a special, nonlapsing revolving 10
894	894	fund that is not subject to reversion under § 7–302 of the State Finance and Procurement 11
895	895	Article. 12
896	896
897	897	(d) (1) The Fund consists of: 13
898	898
899	899	(i) federal money allocated or granted to the Fund, including 14
900	900	adjustment implementation grant money designated for the Fund under the Defense 15
901	901	Conversion and Defense Economic Adjustment Program of the Economic Development 16
902	902	Administration of the United States Department of Commerce; 17
903	903
904	904	(ii) private money donated or granted to the Fund; 18
905	905
906	906	(iii) money appropriated by the State to the Fund; 19
907	907
908	908	(iv) premiums, fees, interest payments, and principal payments on 20
909	909	loans made under this subtitle, including a loan financed by the Economic Development 21
910	910	Opportunities Program Fund under § 7–314(f) of the State Finance and Procurement 22
911	911	Article; 23
912	912
913	913	(v) proceeds from the sale, disposition, lease, or rental of collateral 24
914	914	relating to loans under this subtitle; and 25
915	915
916	916	(vi) any other money made available to the Fund. 26
917	917
918	918	(2) This subtitle does not require an appropriation to the Fund from the 27
919	919	General Fund of the State, regardless of the availability of other funding sources for the 28
920	920	Fund. 29
921	921
922	922	(e) (1) The Fund shall be used to: 30 20 HOUSE BILL 498
923	923
924	924
925	925
926	926	(i) make loans to new or existing companies with 50 or fewer 1
927	927	employees; 2
928	928
929	929	(ii) make grants to local or regional governmental or nonprofit 3
930	930	economic development revolving loan funds in the State; and 4
931	931
932	932	(iii) pay all expenses and disbursements authorized by the 5
933	933	Department for administering the Fund. 6
934	934
935	935	(2) A loan to an eligible company under this subtitle may include: 7
936	936
937	937	(i) advances of loan proceeds for loans; and 8
938	938
939	939	(ii) to the extent allowed by the regulations of the federal Economic 9
940	940	Development Administration of the United States Department of Commerce, money for 10
941	941	expenses for administrative, legal, actuarial, technical, and other services. 11
942	942
943	943	(3) Subject to the restrictions of this subtitle, the Department may make a 12
944	944	loan from the Fund to an applicant only if: 13
945	945
946	946	(i) the applicant meets the qualifications under this subtitle; and 14
947	947
948	948	(ii) the applicant meets any additional requirements imposed by the 15
949	949	source of the money to be loaned. 16
950	950
951	951	(f) (1) The Treasurer shall invest the money of the Fund in the same manner 17
952	952	as other State money may be invested. 18
953	953
954	954	(2) Any investment earnings of the Fund shall be credited to the Fund. 19
955	955
956	956	(3) The Treasurer shall submit a report each year to the Department on: 20
957	957
958	958	(i) the status of the money invested under this subtitle; 21
959	959
960	960	(ii) the market value of the assets in the Fund on the date of the 22
961	961	report; and 23
962	962
963	963	(iii) the interest received from investments for the Fund during the 24
964	964	reporting period. 25
965	965
966	966	5–205. 26
967	967
968	968	(a) An applicant for a loan under this subtitle shall submit to the Department an 27
969	969	application on the form that the Department requires. 28
970	970
971	971	(b) The application shall include: 29 HOUSE BILL 498 21
972	972
973	973
974	974
975	975	(1) a detailed strategic business plan; 1
976	976
977	977	(2) the amount of money required for the activities described in the 2
978	978	strategic business plan; 3
979	979
980	980	(3) the money available to the applicant without financial assistance from 4
981	981	the Department; 5
982	982
983	983	(4) the amount of financial assistance requested from the Department; 6
984	984
985	985	(5) information relating to the financial status of the applicant, including, 7
986	986	if applicable: 8
987	987
988	988	(i) a current balance sheet; 9
989	989
990	990	(ii) a profit and loss statement; and 10
991	991
992	992	(iii) credit references; and 11
993	993
994	994	(6) any other relevant information that the Department requests. 12
995	995
996	996	(C) THE DEPARTMENT MAY NOT AP PROVE AN APPLICATION FOR FINANCIAL 13
997	997	ASSISTANCE UNDER THI S SUBTITLE AFTER JUNE 30, 2025. 14
998	998
999	999	Subtitle 3. Maryland Economic [Development Assistance Authority and] 15
1000	1000	COMPETITIVENESS Fund. 16
1001	1001
1002	1002	5–301. 17
1003	1003
1004	1004	(a) In this subtitle the following words have the meanings indicated. 18
1005	1005
1006	1006	(b) “Aquaculture project” means a project that encourages innovation, expansion, 19
1007	1007	and modernization of the seafood processing industry or aquaculture industry. 20
1008	1008
1009	1009	(c) “Arts and entertainment district” means an area designated by the Secretary 21
1010	1010	as an arts and entertainment district under Title 4, Subtitle 7 of this article. 22
1011	1011
1012	1012	(d) “Arts and entertainment enterprise” means a for–profit or nonprofit entity 23
1013	1013	that is: 24
1014	1014
1015	1015	(1) located in an arts and entertainment district; and 25
1016	1016
1017	1017	(2) dedicated to the visual or performing arts. 26
1018	1018
1019	1019	(e) “Arts and entertainment project” means a project that promotes or enhances 27 22 HOUSE BILL 498
1020	1020
1021	1021
1022	1022	the development of an arts and entertainment district. 1
1023	1023
1024	1024	(f) (1) “Associated development and carrying costs” means costs that are 2
1025	1025	associated with the acquisition and maintenance of an asset. 3
1026	1026
1027	1027	(2) “Associated development and carrying costs” includes: 4
1028	1028
1029	1029	(i) settlement costs; 5
1030	1030
1031	1031	(ii) insurance; 6
1032	1032
1033	1033	(iii) interest; 7
1034	1034
1035	1035	(iv) taxes; 8
1036	1036
1037	1037	(v) government fees; 9
1038	1038
1039	1039	(vi) utilities; and 10
1040	1040
1041	1041	(vii) the costs of managing and securing the asset. 11
1042	1042
1043	1043	(g) [“Authority” means the Maryland Economic Development Assistance 12
1044	1044	Authority. 13
1045	1045
1046	1046	(h)] “Brownfields Revitalization Incentive Program” means the program in the 14
1047	1047	Department that provides financial assistance from the Fund for the redevelopment of 15
1048	1048	qualified brownfields sites, as provided in Part VI of this subtitle. 16
1049	1049
1050	1050	[(i)] (H) (1) “Brownfields site” means a property that: 17
1051	1051
1052	1052	(i) is located in a county or municipal corporation that elects to 18
1053	1053	participate in the Brownfields Revitalization Incentive Program in accordance with § 19
1054	1054	5–316 of this subtitle; and 20
1055	1055
1056	1056	(ii) is: 21
1057	1057
1058	1058	1. an eligible property, as defined in § 7–501 of the 22
1059	1059	Environment Article, that is owned or operated by an inculpable person, as defined in § 23
1060	1060	7–501 of the Environment Article; or 24
1061	1061
1062	1062	2. a property where there is a release, discharge, or 25
1063	1063	threatened release of oil, as defined in § 4–401 of the Environment Article, that is subject 26
1064	1064	to Title 4 of the Environment Article. 27
1065	1065
1066	1066	(2) “Brownfields site” does not include property that is owned or operated 28
1067	1067	by: 29
1068	1068	HOUSE BILL 498 23
1069	1069
1070	1070
1071	1071	(i) a responsible person as defined in § 7–201 of the Environment 1
1072	1072	Article; or 2
1073	1073
1074	1074	(ii) a person responsible for the discharge, as defined in § 4–401 of 3
1075	1075	the Environment Article. 4
1076	1076
1077	1077	[(j)] (I) “Child care facility” means a facility that is required to be licensed as a 5
1078	1078	child care center under Title 9.5, Subtitle 4 of the Education Article. 6
1079	1079
1080	1080	[(k)] (J) “Child care special loan” means a direct loan to expand or improve child 7
1081	1081	care services at a child care facility, as provided in Part VII of this subtitle. 8
1082	1082
1083	1083	[(l)] (K) “Corporation” means the Maryland Economic Development 9
1084	1084	Corporation. 10
1085	1085
1086	1086	[(m)] (L) “Financial assistance” means a grant, loan, or investment provided 11
1087	1087	under this subtitle. 12
1088	1088
1089	1089	[(n)] (M) “Fund” means the Maryland Economic [Development Assistance] 13
1090	1090	COMPETITIVENESS Fund. 14
1091	1091
1092	1092	[(o)] (N) “Local government development fund” means a revolving, nonlapsing 15
1093	1093	fund that one or more local governments establish for economic development in the areas 16
1094	1094	under their jurisdiction. 17
1095	1095
1096	1096	[(p)] (O) “Local economic development opportunity” means a project that: 18
1097	1097
1098	1098	(1) is determined by the Department [or Authority] to provide a valuable 19
1099	1099	economic development opportunity to the jurisdiction in which the project is located; and 20
1100	1100
1101	1101	(2) is a priority for and endorsed by the governing body of that jurisdiction. 21
1102	1102
1103	1103	[(q)] (P) “Local government” means: 22
1104	1104
1105	1105	(1) a county; 23
1106	1106
1107	1107	(2) a municipal corporation; 24
1108	1108
1109	1109	(3) a designated agency or instrumentality of a county; or 25
1110	1110
1111	1111	(4) a designated agency or instrumentality of a municipal corporation. 26
1112	1112
1113	1113	[(r)] (Q) “Qualified brownfields site” means a brownfields site that is determined 27
1114	1114	by the Department to be eligible for financial assistance under this subtitle. 28
1115	1115
1116	1116	[(s)] (R) “Responsible person” has the meaning stated in § 7–201 of the 29 24 HOUSE BILL 498
1117	1117
1118	1118
1119	1119	Environment Article. 1
1120	1120
1121	1121	[(t)] (S) “Significant strategic economic development opportunity” means a 2
1122	1122	project that is determined by the Department [or Authority] to provide a valuable economic 3
1123	1123	development opportunity of statewide, regional, or strategic industry impact. 4
1124	1124
1125	1125	[(u)] (T) “Specialized economic development opportunity” means: 5
1126	1126
1127	1127	(1) an aquaculture project; 6
1128	1128
1129	1129	(2) an arts and entertainment enterprise; 7
1130	1130
1131	1131	(3) an arts and entertainment project; 8
1132	1132
1133	1133	(4) the redevelopment of a qualified brownfields site; or 9
1134	1134
1135	1135	(5) a project to create or expand a child care facility. 10
1136	1136
1137	1137	[(v)] (U) “Tier I county project” means a project that a local government or the 11
1138	1138	Corporation carries out in a Tier I county. 12
1139	1139
1140	1140	[(w)] (V) “Working capital” means money to be used for current operations of a 13
1141	1141	business. 14
1142	1142
1143	1143	[Part II. Maryland Economic Development Assistance Authority.] 15
1144	1144
1145	1145	[5–305. 16
1146	1146
1147	1147	There is a Maryland Economic Development Assistance Authority in the 17
1148	1148	Department.] 18
1149	1149
1150	1150	[5–306. 19
1151	1151
1152	1152	(a) The Authority consists of the individuals serving as members of the Maryland 20
1153	1153	Industrial Development Financing Authority under § 5–406 of this title. 21
1154	1154
1155	1155	(b) The members of the Authority shall be appointed in accordance with § 5–407 22
1156	1156	of this title.] 23
1157	1157
1158	1158	[5–307. 24
1159	1159
1160	1160	(a) The members of the Authority may act concurrently in their capacities as 25
1161	1161	members of the Authority and of the Maryland Industrial Development Financing 26
1162	1162	Authority. 27
1163	1163
1164	1164	(b) The members of the Authority shall carry out the powers and duties of the 28 HOUSE BILL 498 25
1165	1165
1166	1166
1167	1167	Authority under this subtitle whether acting: 1
1168	1168
1169	1169	(1) concurrently as members of the Authority and the Maryland Industrial 2
1170	1170	Development Financing Authority; or 3
1171	1171
1172	1172	(2) as members of either authority alone. 4
1173	1173
1174	1174	(c) The members of the Authority shall conduct the business of the Authority and 5
1175	1175	of the Maryland Industrial Development Financing Authority under Subtitle 4 of this title.] 6
1176	1176
1177	1177	Part III. Maryland Economic [Development Assistance] COMPETITIVENESS Fund. 7
1178	1178
1179	1179	5–310. 8
1180	1180
1181	1181	There is a Maryland Economic [Development Assistance] COMPETITIVENESS Fund 9
1182	1182	in the Department. 10
1183	1183
1184	1184	5–311. 11
1185	1185
1186	1186	The purposes of the Fund are to: 12
1187	1187
1188	1188	(1) expand employment opportunities in the State by providing financial 13
1189	1189	assistance to businesses that are engaged in eligible industry sectors, including financial 14
1190	1190	assistance for: 15
1191	1191
1192	1192	(i) aquaculture projects; 16
1193	1193
1194	1194	(ii) arts and entertainment enterprises; 17
1195	1195
1196	1196	(iii) arts and entertainment projects; and 18
1197	1197
1198	1198	(iv) creation and expansion of child care facilities; 19
1199	1199
1200	1200	(2) provide financial assistance for the redevelopment of qualified 20
1201	1201	brownfields sites; 21
1202	1202
1203	1203	(3) provide financial assistance to local governments and the Corporation 22
1204	1204	for economic development projects; and 23
1205	1205
1206	1206	(4) provide grants to local economic development funds. 24
1207	1207
1208	1208	5–312. 25
1209	1209
1210	1210	(a) The Secretary shall administer the Fund. 26
1211	1211
1212	1212	(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 27
1213	1213	under § 7–302 of the State Finance and Procurement Article. 28 26 HOUSE BILL 498
1214	1214
1215	1215
1216	1216
1217	1217	(2) The Treasurer shall hold the Fund separately and the Comptroller shall 1
1218	1218	account for the Fund. 2
1219	1219
1220	1220	(c) Any investment earnings of the Fund shall be credited to the Fund. 3
1221	1221
1222	1222	5–313. 4
1223	1223
1224	1224	The Fund consists of: 5
1225	1225
1226	1226	(1) money appropriated in the State budget to the Fund; 6
1227	1227
1228	1228	(2) money made available to the Fund through federal programs or private 7
1229	1229	contributions; 8
1230	1230
1231	1231	(3) repayments of principal and interest from loans made from the Fund; 9
1232	1232
1233	1233	(4) proceeds from the sale, disposition, lease, or rental of collateral related 10
1234	1234	to financial assistance provided by the Department under this subtitle; 11
1235	1235
1236	1236	(5) application or other fees paid to the Fund to process requests for 12
1237	1237	financial assistance; 13
1238	1238
1239	1239	(6) recovery of an investment made by the Department in a business, 14
1240	1240	including an arrangement under which part of the investment is recovered through: 15
1241	1241
1242	1242	(i) a requirement that the Department receive a proportion of cash 16
1243	1243	flow, commissions, royalties, or license fees; 17
1244	1244
1245	1245	(ii) the repurchase from the Department of any of its investment 18
1246	1246	interest; or 19
1247	1247
1248	1248	(iii) the sale of an appreciated asset; 20
1249	1249
1250	1250	(7) repayments received from recipients of conditional grants from the 21
1251	1251	Department; 22
1252	1252
1253	1253	(8) money collected under § 9–229 of the Tax – Property Article; 23
1254	1254
1255	1255	(9) repayments on or recoveries from financial assistance provided from 24
1256	1256	the former: 25
1257	1257
1258	1258	(i) Brownfields Revitalization Incentive Fund; 26
1259	1259
1260	1260	(ii) Child Care Facilities Direct Loan Fund; 27
1261	1261
1262	1262	(iii) Child Care Special Loan Fund; 28 HOUSE BILL 498 27
1263	1263
1264	1264
1265	1265
1266	1266	(iv) Maryland Industrial and Commercial Redevelopment Fund; 1
1267	1267
1268	1268	(v) Maryland Industrial Land Fund; 2
1269	1269
1270	1270	(vi) Maryland Seafood and Aquaculture Loan Fund; and 3
1271	1271
1272	1272	(vii) Smart Growth Economic Development Infrastructure Fund; and 4
1273	1273
1274	1274	(10) any other money made available to the Fund. 5
1275	1275
1276	1276	5–314. 6
1277	1277
1278	1278	(a) The Department may use money in the Fund to: 7
1279	1279
1280	1280	(1) provide financial assistance to eligible applicants; and 8
1281	1281
1282	1282	(2) pay expenses for administrative, actuarial, legal, and technical services 9
1283	1283	for the Fund. 10
1284	1284
1285	1285	(b) The Department periodically shall review its portfolio in an effort to ensure: 11
1286	1286
1287	1287	(1) the equitable distribution among the counties of money from the Fund; 12
1288	1288
1289	1289	(2) adequate funding for Tier I county projects; and 13
1290	1290
1291	1291	(3) that no particular Tier I county benefits disproportionately from 14
1292	1292	financial assistance to Tier I counties under this subtitle. 15
1293	1293
1294	1294	5–315. 16
1295	1295
1296	1296	In accordance with § 2.5–109 of this article, the Department shall report on the 17
1297	1297	number, amount, use, and economic benefits of financial assistance provided under this 18
1298	1298	subtitle. 19
1299	1299
1300	1300	5–316. 20
1301	1301
1302	1302	Financial assistance is deemed authorized under this subtitle if it was provided, or 21
1303	1303	approved to be provided, from the following programs that have been incorporated into the 22
1304	1304	Fund: 23
1305	1305
1306	1306	(1) the Brownfields Revitalization Incentive Fund; 24
1307	1307
1308	1308	(2) the Child Care Facilities Direct Loan Fund; 25
1309	1309
1310	1310	(3) the Child Care Special Loan Fund; 26
1311	1311	28 HOUSE BILL 498
1312	1312
1313	1313
1314	1314	(4) the Maryland Industrial and Commercial Redevelopment Fund; 1
1315	1315
1316	1316	(5) the Maryland Industrial Land Act; 2
1317	1317
1318	1318	(6) the Maryland Seafood and Aquaculture Loan Fund; and 3
1319	1319
1320	1320	(7) the Smart Growth Economic Development Infrastructure Fund. 4
1321	1321
1322	1322	5–319. 5
1323	1323
1324	1324	(a) [(1) Financial assistance from the Fund not exceeding $2,500,000 may be 6
1325	1325	approved by the Secretary. 7
1326	1326
1327	1327	(2) Except as provided in paragraph (3) of this subsection, financial 8
1328	1328	assistance from the Fund exceeding $2,500,000 requires approval by the Authority. 9
1329	1329
1330	1330	(3) For a Tier I county project, the Secretary may approve financial 10
1331	1331	assistance exceeding $2,500,000. 11
1332	1332
1333	1333	(b) Except as provided in subsection (a)(3) of this section, with respect to requests 12
1334	1334	for financial assistance exceeding $2,500,000: 13
1335	1335
1336	1336	(1) The Department shall evaluate the requests; and 14
1337	1337
1338	1338	(2) The Authority shall: 15
1339	1339
1340	1340	(i) evaluate the requests that have first been evaluated by the 16
1341	1341	Department; 17
1342	1342
1343	1343	(ii) determine whether to approve the requests; and 18
1344	1344
1345	1345	(iii) set the terms and conditions of the financial assistance. 19
1346	1346
1347	1347	(c)] (1) Except as provided in paragraph (2) of this subsection, financial 20
1348	1348	assistance provided to a local government or the Corporation for a project shall be approved 21
1349	1349	by a formal resolution of: 22
1350	1350
1351	1351	(i) the governing body of the jurisdiction in which the project is 23
1352	1352	located; or 24
1353	1353
1354	1354	(ii) if the recipient of the financial assistance is the Corporation, its 25
1355	1355	board of directors. 26
1356	1356
1357	1357	(2) If the recipient of financial assistance is the Corporation for a Tier I 27
1358	1358	county project, the financial assistance shall be approved by formal resolutions of both the 28
1359	1359	board of directors of the Corporation and the governing body of the jurisdiction in which 29
1360	1360	the project is located. 30 HOUSE BILL 498 29
1361	1361
1362	1362
1363	1363
1364	1364	(3) A project that is funded by a grant from the Fund to a local government 1
1365	1365	or the Corporation, and carried out by the local government or the Corporation, shall be 2
1366	1366	consistent with the strategy or plan for economic development of the county or municipal 3
1367	1367	corporation in which the project is located. 4
1368	1368
1369	1369	(4) If the Department provides financial assistance to a local government 5
1370	1370	for a project, an interest in that project is later transferred to a third party, and the transfer 6
1371	1371	of the interest is financed by the local government: 7
1372	1372
1373	1373	(i) the local government may assign the financing documents to the 8
1374	1374	Department as a repayment of or return on the Department’s financial assistance to the 9
1375	1375	local government; and 10
1376	1376
1377	1377	(ii) the assignment may not be considered a new financing under this 11
1378	1378	subtitle. 12
1379	1379
1380	1380	[(d)] (B) For a local economic development opportunity, the local government of 13
1381	1381	the jurisdiction in which the project is located shall provide[: 14
1382	1382
1383	1383	(1)] a formal resolution of the governing body of the jurisdiction in which 15
1384	1384	the project is located that endorses the financial assistance to be provided from the Fund[; 16
1385	1385	and 17
1386	1386
1387	1387	(2) as determined by the Department or Authority to evidence the support 18
1388	1388	of the local government for the project: 19
1389	1389
1390	1390	(i) a guarantee, secured by the full faith and credit of the county or 20
1391	1391	municipal corporation in which the project is located, of all or part of the financial 21
1392	1392	assistance to be provided by the Fund; 22
1393	1393
1394	1394	(ii) the financing of part of the costs of the project equal to at least 23
1395	1395	10% of the financial assistance to be provided from the Fund; or 24
1396	1396
1397	1397	(iii) both]. 25
1398	1398
1399	1399	5–320. 26
1400	1400
1401	1401	(a) To be eligible for financial assistance from the Fund, an applicant shall be: 27
1402	1402
1403	1403	(1) a local economic development fund that meets the criteria set forth in 28
1404	1404	Part V of this subtitle; or 29
1405	1405
1406	1406	(2) an individual, private business, nonprofit entity, or local government, 30
1407	1407	or the Corporation that intends to use the requested financial assistance for a project that: 31
1408	1408
1409	1409	(i) except as provided in subsection (b) of this section, is in an 32 30 HOUSE BILL 498
1410	1410
1411	1411
1412	1412	eligible industry sector under § 5–321 of this subtitle; and 1
1413	1413
1414	1414	(ii) has a strong potential for expanding or retaining employment 2
1415	1415	opportunities in the State. 3
1416	1416
1417	1417	(b) A project need not be in an eligible industry sector if the applicant: 4
1418	1418
1419	1419	(1) is located in a Tier I county; or 5
1420	1420
1421	1421	(2) (i) is a local government or the Corporation; and 6
1422	1422
1423	1423	(ii) does not intend to use the financial assistance to carry out a 7
1424	1424	project that benefits a particular private sector entity. 8
1425	1425
1426	1426	(c) In form and content acceptable to the Department, an applicant for financial 9
1427	1427	assistance from the Fund shall submit to the Department an application that contains: 10
1428	1428
1429	1429	(1) the information that the Department [or Authority] considers 11
1430	1430	necessary to evaluate the request for financial assistance; and 12
1431	1431
1432	1432	(2) for a Tier I county project: 13
1433	1433
1434	1434	(i) a marketing plan designed to market the project to prospective 14
1435	1435	businesses; 15
1436	1436
1437	1437	(ii) a statement of planned marketing expenditures as a percent of 16
1438	1438	the total financial assistance amount requested; and 17
1439	1439
1440	1440	(iii) a plan for the project that is consistent with the county’s local 18
1441	1441	strategic economic development plan as to the location and type of project. 19
1442	1442
1443	1443	5–321. 20
1444	1444
1445	1445	(a) [(1) After consulting with the Department and the Maryland Department 21
1446	1446	of Labor, each year the Maryland Economic Development Commission shall: 22
1447	1447
1448	1448	(i) evaluate the potential employment and economic growth of 23
1449	1449	Maryland’s industry sectors; and 24
1450	1450
1451	1451	(ii) recommend eligible industry sectors to the Authority. 25
1452	1452
1453	1453	(2) Each year the Authority shall: 26
1454	1454
1455	1455	(i) consider the recommendation of the Maryland Economic 27
1456	1456	Development Commission; and 28
1457	1457
1458	1458	(ii) establish a list of industry sectors that will be eligible for 29 HOUSE BILL 498 31
1459	1459
1460	1460
1461	1461	financial assistance from the Fund. 1
1462	1462
1463	1463	(3) In determining whether an applicant is engaged in an eligible industry 2
1464	1464	sector, the Department shall consider the definitions set forth in the North American 3
1465	1465	Industry Classification System.] EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS 4
1466	1466	SECTION, IN ORDER TO BE CONSI DERED ELIGIBLE FOR F INANCIAL ASSISTANCE 5
1467	1467	FROM THE FUND, A PROJECT SHALL BE E NGAGED IN AN ELIGIBL E INDUSTRY 6
1468	1468	SECTOR AS ESTABLISHE D THROUGH § 2.5–106 OF THIS ARTICLE. 7
1469	1469
1470	1470	(b) (1) For the purpose of providing financial assistance under this subtitle, 8
1471	1471	the following are ALSO deemed to be in eligible industry sectors: 9
1472	1472
1473	1473	(i) aquaculture projects; 10
1474	1474
1475	1475	(ii) arts and entertainment enterprises; 11
1476	1476
1477	1477	(iii) arts and entertainment projects; 12
1478	1478
1479	1479	(iv) redevelopment of qualified brownfields sites; 13
1480	1480
1481	1481	(v) creation or expansion of child care facilities; 14
1482	1482
1483	1483	(vi) projects in areas that are declared to be federal disaster areas 15
1484	1484	within 1 year before the Department receives an application for financial assistance under 16
1485	1485	this subtitle; and 17
1486	1486
1487	1487	(vii) feasibility studies. 18
1488	1488
1489	1489	(2) The requirements specifically imposed on significant strategic economic 19
1490	1490	development opportunities and local economic development opportunities under this 20
1491	1491	subtitle do not apply to the items listed in paragraph (1) of this subsection. 21
1492	1492
1493	1493	5–322. 22
1494	1494
1495	1495	(a) Financial assistance from the Fund may be used only to finance costs incurred 23
1496	1496	for: 24
1497	1497
1498	1498	(1) construction or acquisition of a building or real property, and associated 25
1499	1499	development and carrying costs; 26
1500	1500
1501	1501	(2) construction, acquisition, or installation of equipment, furnishings, 27
1502	1502	fixtures, leasehold improvements, site improvements, or infrastructure improvements, 28
1503	1503	including rail line enhancements on or to the site of an economic development project, and 29
1504	1504	associated development and carrying costs; 30
1505	1505
1506	1506	(3) working capital for significant strategic economic development 31
1507	1507	opportunities, arts and entertainment enterprises, or arts and entertainment projects; 32 32 HOUSE BILL 498
1508	1508
1509	1509
1510	1510
1511	1511	(4) redevelopment of qualified brownfields sites; 1
1512	1512
1513	1513	(5) subject to § 5–325(b)(3) of this subtitle, construction, purchase, or 2
1514	1514	renovation of real property, fixtures, or equipment related to a child care facility; 3
1515	1515
1516	1516	(6) if supported by a resolution adopted by the governing body of the 4
1517	1517	jurisdiction in which a project may be located, feasibility studies; 5
1518	1518
1519	1519	(7) subject to § 5–325(b)(4) of this subtitle, preparation of a county’s or 6
1520	1520	municipal corporation’s strategy or plan for economic development; and 7
1521	1521
1522	1522	(8) a project intended to assist businesses in areas that are declared to be 8
1523	1523	federal disaster areas, but only if the Department receives an application for financial 9
1524	1524	assistance within 1 year after the declaration of the federal disaster area. 10
1525	1525
1526	1526	(b) Financial assistance from the Fund may not be used to refinance existing debt. 11
1527	1527
1528	1528	5–323. 12
1529	1529
1530	1530	Financial assistance from the Fund may not exceed the lesser of: 13
1531	1531
1532	1532	(1) $10,000,000; or 14
1533	1533
1534	1534	(2) 20% of the Fund balance. 15
1535	1535
1536	1536	5–324. 16
1537	1537
1538	1538	(a) Each subsection of this section is subject to § 5–323 of this subtitle. 17
1539	1539
1540	1540	(b) If the Department [or Authority] determines a project to be a significant 18
1541	1541	strategic economic development opportunity, the Department [or Authority] may provide 19
1542	1542	a loan from the Fund for the project to an individual, private business, nonprofit entity, or 20
1543	1543	the Corporation in an amount not exceeding $10,000,000. 21
1544	1544
1545	1545	(c) If the Department [or Authority] determines a project to be a local economic 22
1546	1546	development opportunity, the Department [or Authority] may provide financial assistance 23
1547	1547	from the Fund for the project to an individual, private business, nonprofit entity, or the 24
1548	1548	Corporation in an amount not exceeding: 25
1549	1549
1550	1550	(1) [$5,000,000] $7,500,000 for a loan or investment; and 26
1551	1551
1552	1552	(2) [$2,000,000] $5,000,000 for a grant. 27
1553	1553
1554	1554	(d) (1) Financial assistance provided to a local government or the Corporation 28
1555	1555	to finance a project may be: 29 HOUSE BILL 498 33
1556	1556
1557	1557
1558	1558
1559	1559	(i) in the form of a grant, loan, or investment; and 1
1560	1560
1561	1561	(ii) except as provided in paragraph (2) of this subsection, in an 2
1562	1562	amount not exceeding [$3,000,000] $5,000,000. 3
1563	1563
1564	1564	(2) Financial assistance for a Tier I county project may be in an amount 4
1565	1565	determined by the Department. 5
1566	1566
1567	1567	(3) A grant to a local economic development fund is subject to the 6
1568	1568	requirements of Part V of this subtitle. 7
1569	1569
1570	1570	(e) Financial assistance for a specialized economic development opportunity may 8
1571	1571	be: 9
1572	1572
1573	1573	(1) provided to an individual, private business, nonprofit entity, or local 10
1574	1574	government, or the Corporation; 11
1575	1575
1576	1576	(2) in the form of a grant, loan, or investment; and 12
1577	1577
1578	1578	(3) in an amount determined by the Department [or Authority]. 13
1579	1579
1580	1580	5–325. 14
1581	1581
1582	1582	(a) Subject to the restrictions of this subtitle, the Department [or Authority] may 15
1583	1583	impose the terms and conditions on financial assistance from the Fund as either considers 16
1584	1584	appropriate. 17
1585	1585
1586	1586	(b) (1) Except as provided in paragraph (2), (3), or (4) of this subsection, 18
1587	1587	financial assistance from the Fund may not exceed 70% of the total costs of the project being 19
1588	1588	financed. 20
1589	1589
1590	1590	(2) Financial assistance from the Fund may constitute 100% of the total 21
1591	1591	costs of the project being financed if: 22
1592	1592
1593	1593	(i) the recipient is the Corporation; or 23
1594	1594
1595	1595	(ii) the financial assistance is for: 24
1596	1596
1597	1597	1. an arts and entertainment enterprise; 25
1598	1598
1599	1599	2. an arts and entertainment project; or 26
1600	1600
1601	1601	3. a Tier I county project. 27
1602	1602
1603	1603	(3) (i) Except as provided in subparagraph (ii) of this paragraph, 28
1604	1604	financial assistance from the Fund: 29 34 HOUSE BILL 498
1605	1605
1606	1606
1607	1607
1608	1608	1. may be used to finance up to 50% of the costs of 1
1609	1609	construction, purchase, or renovation of real property, fixtures, or equipment related to a 2
1610	1610	child care facility; but 3
1611	1611
1612	1612	2. may not be used for working capital, supplies, or inventory 4
1613	1613	related to a child care facility. 5
1614	1614
1615	1615	(ii) Financial assistance from the Fund may be used to finance up to 6
1616	1616	20% of the costs described in subparagraph (i) of this paragraph incurred by a business that 7
1617	1617	has received or will receive a day care loan insured by the Maryland Industrial 8
1618	1618	Development Financing Authority. 9
1619	1619
1620	1620	(4) Financial assistance for preparation of a strategy or plan for economic 10
1621	1621	development of a county or municipal corporation may not exceed: 11
1622	1622
1623	1623	(i) 50% of the costs of preparation; or 12
1624	1624
1625	1625	(ii) $50,000 in a 3–year period. 13
1626	1626
1627	1627	(c) [(1) A loan from the Fund shall bear an interest rate below the market rate 14
1628	1628	of interest, as determined by the Department, if the loan is for: 15
1629	1629
1630	1630	(i) a significant strategic economic development opportunity; or 16
1631	1631
1632	1632	(ii) a specialized economic development opportunity. 17
1633	1633
1634	1634	(2) A loan from the Fund for a Tier I county project shall bear an interest 18
1635	1635	rate determined by the Department or the Authority. 19
1636	1636
1637	1637	(3) A loan from the Fund shall bear an interest rate not exceeding 20
1638	1638	one–eighth of 1% plus the net interest cost of the most recent State general obligation bond 21
1639	1639	issue preceding the approval of the loan if the loan is: 22
1640	1640
1641	1641	(i) for a local economic development opportunity; or 23
1642	1642
1643	1643	(ii) to a local government. 24
1644	1644
1645	1645	(4) A loan from the Fund may not bear an interest rate of less than 3% 25
1646	1646	unless: 26
1647	1647
1648	1648	(i) the project funded by the loan is located in an area of high 27
1649	1649	unemployment; or 28
1650	1650
1651	1651	(ii) the Department determines that the borrower is carrying out a 29
1652	1652	compelling economic development initiative. 30
1653	1653	HOUSE BILL 498 35
1654	1654
1655	1655
1656	1656	(d) (1) The Department may waive interest during the first 2 years of the term 1
1657	1657	of a loan from the Fund. 2
1658	1658
1659	1659	(2) If a borrower defaults on a loan from the Fund, the Department may 3
1660	1660	impose an interest rate that exceeds the limits set forth in subsection (c)(1) or (3) of this 4
1661	1661	section. 5
1662	1662
1663	1663	(e) The term of a loan from the Fund may not exceed: 6
1664	1664
1665	1665	(1) for working capital, 3 years; 7
1666	1666
1667	1667	(2) for financing equipment, furnishings, or fixtures, the lesser of 15 years 8
1668	1668	or the useful life of the asset, as determined by the Department; 9
1669	1669
1670	1670	(3) for financing the construction or acquisition of buildings and real 10
1671	1671	property, 25 years; and 11
1672	1672
1673	1673	(4) for financing the redevelopment of a qualified brownfields site or a Tier 12
1674	1674	I county project, a term approved by the Department or Authority] THE DEPARTMENT 13
1675	1675	SHALL DETERMINE WHET HER A LOAN FROM THE FUND SHALL BEAR INTER EST AND, 14
1676	1676	IF SO, THE INTEREST RATE . 15
1677	1677
1678	1678	5–329. 16
1679	1679
1680	1680	(a) A local government may apply to the Department for a grant from the Fund 17
1681	1681	to a local economic development fund. 18
1682	1682
1683	1683	(b) In determining whether to approve a grant to a local economic development 19
1684	1684	fund, the Department [or Authority] shall consider and determine: 20
1685	1685
1686	1686	(1) the average rate of unemployment for the local jurisdiction in 21
1687	1687	comparison to the average rate of unemployment for the State; 22
1688	1688
1689	1689	(2) whether the local government currently administers a local economic 23
1690	1690	development fund; 24
1691	1691
1692	1692	(3) the ability of the local government to leverage private money; 25
1693	1693
1694	1694	(4) the level of financial commitment provided by the local government; 26
1695	1695	and 27
1696	1696
1697	1697	(5) any other factors that the Department [or Authority] considers 28
1698	1698	relevant. 29
1699	1699
1700	1700	5–338. 30
1701	1701	36 HOUSE BILL 498
1702	1702
1703	1703
1704	1704	(d) (1) The Department shall notify the person whether the person qualifies 1
1705	1705	for financial assistance for the redevelopment of a brownfields site within 30 days after the 2
1706	1706	Department receives a request under subsection (c) of this section if: 3
1707	1707
1708	1708	(i) the Department of the Environment approves the participation 4
1709	1709	in the Voluntary Cleanup Plan or a corrective action plan; and 5
1710	1710
1711	1711	(ii) the Department [or Authority] approves the financial assistance. 6
1712	1712
1713	1713	(2) The notice shall specify which of the criteria in subsection (b) of this 7
1714	1714	section that the person meets. 8
1715	1715
1716	1716	5–401. 9
1717	1717
1718	1718	(a) In this subtitle the following words have the meanings indicated. 10
1719	1719
1720	1720	(b) “Authority” means the Maryland Industrial Development Financing 11
1721	1721	Authority. 12
1722	1722
1723	1723	(p) “Fund” means the Industrial Development Fund established under § 5–423 of 13
1724	1724	this subtitle. 14
1725	1725
1726	1726	5–464. 15
1727	1727
1728	1728	THE AUTHORITY AND THE SECRETARY MAY NOT APP ROVE FINANCIAL 16
1729	1729	ASSISTANCE FROM THE FUND OR THE ISSUANCE OF BONDS UNDER THIS SUBTITLE 17
1730	1730	AFTER JUNE 30, 2025. 18
1731	1731
1732	1732	Subtitle 5. Maryland [Small Business Development Financing Authority] ECONOMIC 19
1733	1733	INCLUSION FUND. 20
1734	1734
1735	1735	5–501. 21
1736	1736
1737	1737	(a) In this subtitle the following words have the meanings indicated. 22
1738	1738
1739	1739	(b) [“Authority” means the Maryland Small Business Development Financing 23
1740	1740	Authority. 24
1741	1741
1742	1742	(c)] “Financial institution” means: 25
1743	1743
1744	1744	(1) a financial institution, as defined in § 1–101 of the Financial 26
1745	1745	Institutions Article; and 27
1746	1746
1747	1747	(2) any other lender that the Authority approves. 28
1748	1748
1749	1749	(C) “FUND” MEANS THE MARYLAND ECONOMIC INCLUSION FUND. 29 HOUSE BILL 498 37
1750	1750
1751	1751
1752	1752
1753	1753	(d) (1) “Loan document” means an instrument or agreement that evidences, 1
1754	1754	secures, or guarantees a loan. 2
1755	1755
1756	1756	(2) “Loan document” includes a note, financing statement, mortgage, 3
1757	1757	pledge, assignment, loan and security agreement, or guaranty. 4
1758	1758
1759	1759	(e) (1) “Working capital” means money used to meet the cash needs of an 5
1760	1760	operating business entity. 6
1761	1761
1762	1762	(2) “Working capital” does not include money used for a capital purchase. 7
1763	1763
1764	1764	5–502. 8
1765	1765
1766	1766	(a) The General Assembly finds that: 9
1767	1767
1768	1768	(1) the inability of socially or economically disadvantaged individuals to 10
1769	1769	obtain working capital is a major limitation on their opportunity to win and perform 11
1770	1770	government and other contracts; 12
1771	1771
1772	1772	(2) because socially or economically disadvantaged individuals frequently 13
1773	1773	have been awarded government or other contracts but have lacked the working capital to 14
1774	1774	post a bond, buy supplies needed to begin the work, or pay employees, these individuals 15
1775	1775	have been unable to accept the contracts; 16
1776	1776
1777	1777	(3) some individuals are unable to obtain government and other contracts 17
1778	1778	for reasons other than the cost to the owner or the ability to perform the contract work 18
1779	1779	competently; 19
1780	1780
1781	1781	(4) socially or economically disadvantaged individuals frequently lack 20
1782	1782	adequate capital to sustain and expand their businesses and to hire and train employees; 21
1783	1783
1784	1784	(5) because high risk, problem, or uncollectible loans are not in the interest 22
1785	1785	of financial institutions, financial institutions generally are reluctant to lend money to 23
1786	1786	socially or economically disadvantaged individuals with insufficient records of 24
1787	1787	performance; 25
1788	1788
1789	1789	(6) the inability of businesses owned by socially or economically 26
1790	1790	disadvantaged individuals to obtain long–term financing is a major limitation on their 27
1791	1791	opportunity to survive and expand; and 28
1792	1792
1793	1793	(7) the public welfare is served by promoting the viability and expansion of 29
1794	1794	businesses owned by economically or socially disadvantaged individuals, retaining or 30
1795	1795	increasing the employment of these individuals, and expanding the taxable base of the 31
1796	1796	economy of the State. 32
1797	1797
1798	1798	(b) The purposes of the [Authority] FUND are: 33 38 HOUSE BILL 498
1799	1799
1800	1800
1801	1801
1802	1802	(1) to assist socially or economically disadvantaged individuals to obtain 1
1803	1803	adequate working capital to begin, continue, and complete projects[, the majority of funding 2
1804	1804	for which is provided by government entities or utilities]; 3
1805	1805
1806	1806	(2) to encourage socially or economically disadvantaged individuals to seek 4
1807	1807	government and other contracts; 5
1808	1808
1809	1809	(3) to encourage financial institutions to make loans to these individuals; 6
1810	1810	and 7
1811	1811
1812	1812	(4) to assist small businesses that are unable to obtain adequate business 8
1813	1813	financing on reasonable terms through normal financing channels because the businesses 9
1814	1814	do not meet the established credit criteria of financial institutions. 10
1815	1815
1816	1816	Part II. Maryland [Small Business Development Financing Authority] ECONOMIC 11
1817	1817	INCLUSION FUND. 12
1818	1818
1819	1819	5–505. 13
1820	1820
1821	1821	(A) There is a Maryland [Small Business Development Financing Authority] 14
1822	1822	ECONOMIC INCLUSION FUND in the Department. 15
1823	1823
1824	1824	(B) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 16
1825	1825	REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 17
1826	1826
1827	1827	(C) THE TREASURER SHALL : 18
1828	1828
1829	1829	(1) INVEST THE MONEY IN THE FUND IN THE SAME MANN ER AS OTHER 19
1830	1830	STATE MONEY MAY BE IN VESTED; 20
1831	1831
1832	1832	(2) CREDIT ANY INVESTMEN T EARNINGS TO THE FUND; AND 21
1833	1833
1834	1834	(3) REPORT EACH YEAR TO THE DEPARTMENT ON : 22
1835	1835
1836	1836	(I) THE STATUS OF THE MO NEY INVESTED UNDER T HIS 23
1837	1837	SUBTITLE; 24
1838	1838
1839	1839	(II) THE MARKET VALUE OF THE ASSETS IN THE FUND AS OF THE 25
1840	1840	DATE OF THE REPORT ; AND 26
1841	1841
1842	1842	(III) THE INTEREST RECEIVE D FROM INVESTMENTS D URING THE 27
1843	1843	PERIOD COVERED BY TH E REPORT. 28
1844	1844
1845	1845	(D) (1) THE FUND IS THE SUCCESSOR OF THE SMALL BUSINESS 29 HOUSE BILL 498 39
1846	1846
1847	1847
1848	1848	DEVELOPMENT CONTRACT FINANCING FUND, THE SMALL BUSINESS 1
1849	1849	DEVELOPMENT GUARANTY FUND, THE EQUITY PARTICIPATION INVESTMENT 2
1850	1850	INCENTIVE PROGRAM FUND, AND THE SMALL BUSINESS SURETY BOND FUND 3
1851	1851	ESTABLISHED UNDER TH E MARYLAND SMALL BUSINESS DEVELOPMENT 4
1852	1852	FINANCING AUTHORITY. 5
1853	1853
1854	1854	(2) ALL FINANCIAL ASSISTA NCE TRANSACTIONS AND OBLIGATIONS 6
1855	1855	APPROVED BY THE MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 7
1856	1856	AUTHORITY SHALL CONTI NUE AS OBLIGATIONS O F THE FUND AND ARE 8
1857	1857	AUTHORIZED UNDER THI S SUBTITLE. 9
1858	1858
1859	1859	[5–506. 10
1860	1860
1861	1861	(a) The Authority consists of the following nine members: 11
1862	1862
1863	1863	(1) seven members appointed by the Governor; 12
1864	1864
1865	1865	(2) the Secretary or the Secretary’s designee; and 13
1866	1866
1867	1867	(3) (i) the Comptroller or the Treasurer as designated by the Governor; 14
1868	1868	or 15
1869	1869
1870	1870	(ii) the designee of the Governor’s designee. 16
1871	1871
1872	1872	(b) (1) The term of an appointed member is 5 years. 17
1873	1873
1874	1874	(2) The terms of appointed members are staggered as required for 18
1875	1875	appointments to the Authority on October 1, 2008. 19
1876	1876
1877	1877	(3) At the end of a term, an appointed member continues to serve until a 20
1878	1878	successor is appointed and qualifies. 21
1879	1879
1880	1880	(4) A member who is appointed after a term has begun serves only for the 22
1881	1881	rest of the term and until a successor is appointed and qualifies. 23
1882	1882
1883	1883	(c) The Governor may remove an appointed member for cause.] 24
1884	1884
1885	1885	5–506. 25
1886	1886
1887	1887	THE FUND CONSISTS OF : 26
1888	1888
1889	1889	(1) PREMIUMS FOR GUARANTEEING LOA NS UNDER THIS SUBTIT LE; 27
1890	1890
1891	1891	(2) PREMIUMS FOR GUARANT EEING EQUITY INVESTM ENTS UNDER 28
1892	1892	THIS SUBTITLE; 29 40 HOUSE BILL 498
1893	1893
1894	1894
1895	1895
1896	1896	(3) REPAYMENTS OF PRINCI PAL OF AND INTEREST ON DIRECT LOANS 1
1897	1897	AND EQUITY PARTICIPA TION FINANCING MADE UNDER THIS SUBTITLE ; 2
1898	1898
1899	1899	(4) PROCEEDS FROM THE SA LE, DISPOSITION, LEASE, OR RENTAL OF 3
1900	1900	COLLATERAL FOR DIREC T LOANS, LOAN GUARANTIES , OR EQUITY PARTICIPAT ION 4
1901	1901	FINANCING MADE UNDER THIS SUBTITLE; 5
1902	1902
1903	1903	(5) LOANS AND GRANTS FRO M THE FEDERAL GOVERN MENT OR A UNIT 6
1904	1904	OR INSTRUMENTALITY O F THE FEDERAL GOVERNMENT ; 7
1905	1905
1906	1906	(6) GRANTS AND CONTRIBUT IONS OF FUNDS FROM T HE STATE, A 8
1907	1907	POLITICAL SUBDIVISIO N, OR ANY OTHER SOURCE ; 9
1908	1908
1909	1909	(7) PREMIUMS FOR GUARANT EEING LONG TERM LOAN S UNDER § 10
1910	1910	5–523 OF THIS SUBTITLE ; 11
1911	1911
1912	1912	(8) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR ANY 12
1913	1913	OTHER LAW , ANY RECOVERY OF INVE STMENTS MADE UNDER § 10–469 OF THIS 13
1914	1914	ARTICLE THAT WERE FU NDED BY A TRANSFER O F MONEY FROM THE FUN DS UNDER 14
1915	1915	THIS SUBTITLE TO THE ENTERPRISE FUND, INCLUDING AN INVESTM ENT IN MMG 15
1916	1916	VENTURES LLP; 16
1917	1917
1918	1918	(9) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR A NY 17
1919	1919	OTHER LAW, ANY REPAYMENT OF A G RANT MADE UNDER § 10–469 OF THIS ARTICLE 18
1920	1920	THAT WAS FUNDED BY A TRANSFER OF MONEY FR OM THE FUNDS UNDER T HIS 19
1921	1921	SUBTITLE TO THE ENTERPRISE FUND; 20
1922	1922
1923	1923	(10) MONEY THAT THE STATE APPROPRIATES T O THE FUND; 21
1924	1924
1925	1925	(11) MONEY MADE AVAILABLE TO THE FUND THROUGH FEDERAL 22
1926	1926	PROGRAMS OR PRIVATE CONTRIBUTIONS ; 23
1927	1927
1928	1928	(12) PREMIUMS, FEES, ROYALTIES, AND REPAYMENTS OF 24
1929	1929	INVESTMENTS MADE UND ER THE TERMS OF BOND ING ASSISTANCE AND E QUITY 25
1930	1930	PARTICIPATION FINANC ING; 26
1931	1931
1932	1932	(13) REPAYMENT OF FINANCI AL ASSISTANCE PROVID ED FROM THE 27
1933	1933	MARYLAND ECONOMIC ADJUSTMENT FUND ESTABLISHED UNDE R § 5–203 OF THIS 28
1934	1934	ARTICLE; AND 29
1935	1935
1936	1936	(14) ALL OTHER RECEIPTS O F THE DEPARTMENT UNDER THIS 30
1937	1937	SUBTITLE. 31 HOUSE BILL 498 41
1938	1938
1939	1939
1940	1940
1941	1941	[5–507. 1
1942	1942
1943	1943	(a) The Authority shall elect a chair, vice chair, and treasurer from among its 2
1944	1944	members. 3
1945	1945
1946	1946	(b) The Authority shall determine the manner of election of officers and their 4
1947	1947	terms.] 5
1948	1948
1949	1949	5–507. 6
1950	1950
1951	1951	AT LEAST HALF OF THE ANNUAL APPROPRIATION TO THE FUND MUST BE 7
1952	1952	RESERVED FOR BUSINES S ACTIVITIES INCLUDE D ON THE LIST OF INDUSTRIES AN D 8
1953	1953	ACTIVITIES DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF 9
1954	1954	THIS ARTICLE. 10
1955	1955
1956	1956	[5–508. 11
1957	1957
1958	1958	(a) (1) Four members of the Authority are a quorum. 12
1959	1959
1960	1960	(2) The Authority may not act on any matter unless at least four members 13
1961	1961	in attendance concur. 14
1962	1962
1963	1963	(b) The Authority shall determine the times and places of its meetings. 15
1964	1964
1965	1965	(c) A member of the Authority is entitled to reimbursement for expenses under 16
1966	1966	the Standard State Travel Regulations, as provided in the State budget. 17
1967	1967
1968	1968	(d) The Authority may employ a staff in accordance with the State budget.] 18
1969	1969
1970	1970	5–508. 19
1971	1971
1972	1972	IN ORDER TO ADMINISTE R THE FUND, THE DEPARTMENT MAY : 20
1973	1973
1974	1974	(1) CONTRACT FOR AND ENG AGE THE SERVICES OF A PRIVATE 21
1975	1975	MARYLAND CORPORATION TO ADMINISTER SOME O R ALL OF THE PROGRAM S OF THE 22
1976	1976	FUND; 23
1977	1977
1978	1978	(2) CONTRACT FOR AND ACC EPT, TO CARRY OUT THIS SU BTITLE, A 24
1979	1979	LOAN OR GRANT FROM T HE FEDERAL GOVERNMEN T, A POLITICAL SUBDIVIS ION OF 25
1980	1980	THE STATE, OR ANY OTHER SOURCE ; 26
1981	1981
1982	1982	(3) PURCHASE, RECEIVE, LEASE AS LESSEE, OR OTHERWISE ACQUIRE , 27
1983	1983	SELL, MORTGAGE , LEASE AS LE SSOR, PLEDGE, ADMINISTER, DISPOSE OF, OR 28
1984	1984	OTHERWISE DEAL WITH PROPERTY GIVEN AS CO LLATERAL UNDER A LOA N 29 42 HOUSE BILL 498
1985	1985
1986	1986
1987	1987	AGREEMENT ON THE TER MS AND CONDITIONS IT CONSIDERS ADVISABLE ; 1
1988	1988
1989	1989	(4) ADOPT REGULATIONS NE CESSARY TO CARRY OUT ITS POWERS; 2
1990	1990
1991	1991	(5) ACQUIRE OR TAKE ASSI GNMENTS OF LOAN DOCUMENT S; AND 3
1992	1992
1993	1993	(6) DO ANYTHING NECESSAR Y OR CONVENIENT TO C ARRY OUT ITS 4
1994	1994	POWERS. 5
1995	1995
1996	1996	[5–509. 6
1997	1997
1998	1998	(a) (1) The Executive Director is the chief administrative officer of the 7
1999	1999	Authority. 8
2000	2000
2001	2001	(2) With the approval of the Secretary, the Authority may: 9
2002	2002
2003	2003	(i) appoint the Executive Director; or 10
2004	2004
2005	2005	(ii) contract with a private entity to perform the duties of the 11
2006	2006	Executive Director. 12
2007	2007
2008	2008	(b) The Executive Director serves at the pleasure of the Authority, with the 13
2009	2009	concurrence of the Secretary. 14
2010	2010
2011	2011	(c) In addition to any other duties set forth in this subtitle, the Executive Director 15
2012	2012	shall: 16
2013	2013
2014	2014	(1) supervise the administrative affairs and technical activities of the 17
2015	2015	Authority in accordance with its regulations and policies; 18
2016	2016
2017	2017	(2) attend all meetings of the Authority; 19
2018	2018
2019	2019	(3) keep minutes of all proceedings of the Authority; 20
2020	2020
2021	2021	(4) approve all accounts for salaries, per diem payments, and allowable 21
2022	2022	expenses of the Authority, its employees, and its consultants; 22
2023	2023
2024	2024	(5) approve all expenses incidental to the operation of the Authority; and 23
2025	2025
2026	2026	(6) perform any other duty that the Authority or the Secretary requires to 24
2027	2027	carry out this subtitle.] 25
2028	2028
2029	2029	[5–510. 26
2030	2030
2031	2031	A member of the Authority may not participate in any decision related to the 27
2032	2032	approval of financial assistance if the member has any interest in: 28 HOUSE BILL 498 43
2033	2033
2034	2034
2035	2035
2036	2036	(1) the applicant for the assistance; or 1
2037	2037
2038	2038	(2) the financial institution seeking a guaranty or an interest subsidy or 2
2039	2039	both.] 3
2040	2040
2041	2041	[5–511. 4
2042	2042
2043	2043	(a) In this section, “Authority staff” means any of the individuals who are 5
2044	2044	employed by the Department to operate the programs of the Authority immediately prior 6
2045	2045	to the execution by the Department of a contract under this section with the private 7
2046	2046	corporation organized by any of those individuals. 8
2047	2047
2048	2048	(b) (1) The Department may contract for and engage the services of some or 9
2049	2049	all of the Authority staff to administer the programs of the Authority, for a period of 3 years, 10
2050	2050	if the Authority staff has organized itself as a private Maryland corporation. 11
2051	2051
2052	2052	(2) The Department may: 12
2053	2053
2054	2054	(i) extend the termination date of the contract in effect as of 13
2055	2055	September 30, 2008, to June 30, 2012, and modify that extended contract as needed; and 14
2056	2056
2057	2057	(ii) renew the extended contract for up to two additional 5–year 15
2058	2058	terms, and modify that renewed and extended contract as needed. 16
2059	2059
2060	2060	(3) An extension or renewal contract shall include standards to evaluate 17
2061	2061	the performance of the private contractor in rendering services under the contract. 18
2062	2062
2063	2063	(c) In its name the corporation may use “Maryland Small Business Development 19
2064	2064	Financing Agency”, “MSBDFA, Inc.”, or any close approximation of those terms.] 20
2065	2065
2066	2066	[5–512. 21
2067	2067
2068	2068	(a) The Authority exercises its powers and performs its duties subject to the 22
2069	2069	authority of the Secretary. 23
2070	2070
2071	2071	(b) The Authority may: 24
2072	2072
2073	2073	(1) adopt bylaws for the conduct of its business; 25
2074	2074
2075	2075	(2) adopt a seal; 26
2076	2076
2077	2077	(3) maintain offices in the State; 27
2078	2078
2079	2079	(4) sue and be sued in its own name; 28
2080	2080
2081	2081	(5) retain consultants; 29 44 HOUSE BILL 498
2082	2082
2083	2083
2084	2084
2085	2085	(6) use the services of governmental units; 1
2086	2086
2087	2087	(7) contract for and accept, to carry out this subtitle, a loan or grant from 2
2088	2088	the federal government, a political subdivision of the State, or any other source; 3
2089	2089
2090	2090	(8) purchase, receive, lease as lessee, or otherwise acquire, sell, mortgage, 4
2091	2091	lease as lessor, pledge, administer, dispose of, or otherwise deal with property given as 5
2092	2092	collateral under a loan agreement on the terms and conditions it considers advisable; 6
2093	2093
2094	2094	(9) adopt regulations necessary to carry out its powers; 7
2095	2095
2096	2096	(10) acquire or take assignments of loan documents; and 8
2097	2097
2098	2098	(11) do anything necessary or convenient to carry out its powers. 9
2099	2099
2100	2100	(c) The Authority shall: 10
2101	2101
2102	2102	(1) in its internal functions, follow the procedures of the State that govern 11
2103	2103	the purchase of office space, supplies, facilities, materials, equipment, and professional 12
2104	2104	services; 13
2105	2105
2106	2106	(2) keep proper records of its accounts; 14
2107	2107
2108	2108	(3) keep separate records for: 15
2109	2109
2110	2110	(i) the Small Business Development Contract Financing Fund 16
2111	2111	under Part III of this subtitle; 17
2112	2112
2113	2113	(ii) the Small Business Development Guaranty Fund under Part IV 18
2114	2114	of this subtitle; 19
2115	2115
2116	2116	(iii) the Equity Participation Investment Program Fund under Part 20
2117	2117	V of this subtitle; and 21
2118	2118
2119	2119	(iv) the Small Business Surety Bond Fund under Part VI of this 22
2120	2120	subtitle; and 23
2121	2121
2122	2122	(4) in accordance with § 2.5–109 of this article, submit a report on its 24
2123	2123	condition and operations.] 25
2124	2124
2125	2125	[5–513. 26
2126	2126
2127	2127	(a) In any action, service of process on the Authority shall be made by service on 27
2128	2128	the Executive Director of the Authority. 28
2129	2129
2130	2130	(b) Service may be made in person or by leaving a copy of the process at the office 29 HOUSE BILL 498 45
2131	2131
2132	2132
2133	2133	of the Executive Director with the individual in charge of the office.] 1
2134	2134
2135	2135	[5–514. 2
2136	2136
2137	2137	(a) Notwithstanding § 10–469(e) and (f) of this article or any other law, the 3
2138	2138	following money shall be payable into the funds under this subtitle: 4
2139	2139
2140	2140	(1) any recovery of investments made under § 10–469 of this article that 5
2141	2141	were funded by a transfer of money from the funds under this subtitle to the Enterprise 6
2142	2142	Fund, including an investment in MMG Ventures LLP; and 7
2143	2143
2144	2144	(2) any repayment of a grant made under § 10–469 of this article that was 8
2145	2145	funded by a transfer of money from the funds under this subtitle to the Enterprise Fund. 9
2146	2146
2147	2147	(b) The Authority shall determine the proportion of the recovery or repayment 10
2148	2148	payable under subsection (a) of this section that shall be deposited into each of the funds 11
2149	2149	under this subtitle.] 12
2150	2150
2151	2151	5–509. RESERVED. 13
2152	2152
2153	2153	5–510. RESERVED. 14
2154	2154
2155	2155	Part III. Small Business Development Contract Financing [Fund] PROGRAM. 15
2156	2156
2157	2157	[5–517.] 5–511. 16
2158	2158
2159	2159	In this part, [“Fund”] “PROGRAM” means the Small Business Development 17
2160	2160	Contract Financing [Fund] PROGRAM. 18
2161	2161
2162	2162	[5–518.] 5–512. 19
2163	2163
2164	2164	There is a Small Business Development Contract Financing [Fund] PROGRAM 20
2165	2165	WITHIN THE FUND. 21
2166	2166
2167	2167	[5–519. 22
2168	2168
2169	2169	The Authority shall use the Fund to implement this part.] 23
2170	2170
2171	2171	[5–520. 24
2172	2172
2173	2173	The Authority shall administer the Fund.] 25
2174	2174
2175	2175	[5–521. 26
2176	2176
2177	2177	(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 27 46 HOUSE BILL 498
2178	2178
2179	2179
2180	2180	§ 7–302 of the State Finance and Procurement Article. 1
2181	2181
2182	2182	(b) The Treasurer shall: 2
2183	2183
2184	2184	(1) invest the money in the Fund in the same manner as other State money 3
2185	2185	may be invested; and 4
2186	2186
2187	2187	(2) credit any investment earnings to the Fund. 5
2188	2188
2189	2189	(c) If the Authority determines by resolution that any money in the Fund is no 6
2190	2190	longer needed to meet its obligations, the Authority may authorize the Comptroller to first 7
2191	2191	employ that money to pay the principal of and interest on outstanding bonds issued under 8
2192	2192	any Act authorizing the issue of State general obligation bonds issued to implement this 9
2193	2193	subtitle.] 10
2194	2194
2195	2195	[5–522. 11
2196	2196
2197	2197	The Fund consists of: 12
2198	2198
2199	2199	(1) premiums for guaranteeing loans under § 5–525(a) of this subtitle; 13
2200	2200
2201	2201	(2) premiums for guaranteeing equity investments under § 5–525(b) of this 14
2202	2202	subtitle; 15
2203	2203
2204	2204	(3) repayments of principal of and interest on direct loans made under § 16
2205	2205	5–525(c) of this subtitle; 17
2206	2206
2207	2207	(4) proceeds from the sale, disposition, lease, or rental of collateral for 18
2208	2208	direct loans or loan guaranties made under § 5–525 of this subtitle; and 19
2209	2209
2210	2210	(5) all other receipts of the Authority under this part.] 20
2211	2211
2212	2212	[5–523. 21
2213	2213
2214	2214	(a) If the Authority and the Secretary determine that more money is needed to 22
2215	2215	keep the Fund at an adequate level, the Authority shall send a written request for the 23
2216	2216	additional money to the Board of Public Works. 24
2217	2217
2218	2218	(b) The Board of Public Works may pay the amount requested from the General 25
2219	2219	Emergency Fund.] 26
2220	2220
2221	2221	[5–524.] 5–513. 27
2222	2222
2223	2223	The [Authority] DEPARTMENT may use the Fund for: 28
2224	2224
2225	2225	(1) loan guaranties made under [§ 5–525(a)] § 5–514(A) of this subtitle; 29 HOUSE BILL 498 47
2226	2226
2227	2227
2228	2228
2229	2229	(2) equity investment guaranties made under [§ 5–525(b)] § 5–514(B) of 1
2230	2230	this subtitle; 2
2231	2231
2232	2232	(3) direct loans made under [§ 5–525(c)] § 5–514(C) of this subtitle; and 3
2233	2233
2234	2234	(4) expenses for administrative, legal, actuarial, and other services. 4
2235	2235
2236	2236	[5–525.] 5–514. 5
2237	2237
2238	2238	(a) (1) The [Authority] DEPARTMENT may use the Fund to guarantee a loan 6
2239	2239	made to an applicant only if: 7
2240	2240
2241	2241	(i) the applicant meets the requirements of this part; 8
2242	2242
2243	2243	(ii) [the loan is to be used to perform a contract for which the 9
2244	2244	majority of the funding is provided by the federal government, a state government, a local 10
2245	2245	government, or a utility regulated by the Public Service Commission; 11
2246	2246
2247	2247	(iii)] the maximum amount payable by the [Authority] 12
2248	2248	DEPARTMENT under the guaranty does not exceed [$2,000,000] $3,000,000; and 13
2249	2249
2250	2250	[(iv)] (III) the guaranteed loan is to be used for: 14
2251	2251
2252	2252	1. working capital; or 15
2253	2253
2254	2254	2. equipment needed to perform the contract, the cost of 16
2255	2255	which can be repaid from contract proceeds, if the [Authority] DEPARTMENT has entered 17
2256	2256	into an agreement with the applicant to secure the loan or guaranty. 18
2257	2257
2258	2258	(2) A guaranty made by the [Authority] DEPARTMENT may not exceed the 19
2259	2259	term of the contract, unless the [Authority] DEPARTMENT determines that a longer term 20
2260	2260	better serves the purposes of this subtitle. 21
2261	2261
2262	2262	(b) (1) The [Authority] DEPARTMENT may use the Fund to guarantee a 22
2263	2263	person’s proposed equity investment in the applicant only if: 23
2264	2264
2265	2265	(i) the applicant meets the requirements of this part; 24
2266	2266
2267	2267	(ii) the amount of the equity investment to be guaranteed does not 25
2268	2268	exceed the lesser of: 26
2269	2269
2270	2270	1. 10% of the person’s equity investment in the applicant; or 27
2271	2271
2272	2272	2. $250,000; AND 28
2273	2273	48 HOUSE BILL 498
2274	2274
2275	2275
2276	2276	(iii) [the equity investment to be guaranteed is to be used to perform 1
2277	2277	a contract for which the majority of funding is provided by the federal government, a state 2
2278	2278	government, a local government, or a utility regulated by the Public Service Commission; 3
2279	2279	and 4
2280	2280
2281	2281	(iv)] the equity investment to be guaranteed is to be used for: 5
2282	2282
2283	2283	1. working capital; or 6
2284	2284
2285	2285	2. equipment needed to perform the contract, the cost of 7
2286	2286	which can be repaid from contract proceeds, if the [Authority] DEPARTMENT has entered 8
2287	2287	into an agreement with the applicant to secure the guaranty. 9
2288	2288
2289	2289	(2) The [Authority] DEPARTMENT may not guarantee the equity 10
2290	2290	investment of a person who: 11
2291	2291
2292	2292	(i) previously held an equity investment in the applicant; 12
2293	2293
2294	2294	(ii) previously participated in the management of the applicant; or 13
2295	2295
2296	2296	(iii) in any other manner is related to: 14
2297	2297
2298	2298	1. the applicant; or 15
2299	2299
2300	2300	2. any of the current stockholders, officers, or management 16
2301	2301	personnel of the applicant. 17
2302	2302
2303	2303	(c) (1) The [Authority] DEPARTMENT may use the Fund to lend money to an 18
2304	2304	applicant only if: 19
2305	2305
2306	2306	(i) the applicant meets the requirements of this part; 20
2307	2307
2308	2308	(ii) the applicant is unable to obtain money on reasonable terms 21
2309	2309	through normal lending channels from another source; 22
2310	2310
2311	2311	(iii) the loan does not exceed [$2,000,000] $3,000,000; AND 23
2312	2312
2313	2313	(iv) [the loan is to be used to perform a contract for which the 24
2314	2314	majority of funding is provided by the federal government, a state government, a local 25
2315	2315	government, or a utility regulated by the Public Service Commission; and 26
2316	2316
2317	2317	(v)] the loan is to be used for: 27
2318	2318
2319	2319	1. working capital; or 28
2320	2320
2321	2321	2. equipment needed to perform the contract, if the contract 29 HOUSE BILL 498 49
2322	2322
2323	2323
2324	2324	proceeds can repay the cost of the equipment and if the [Authority] DEPARTMENT has 1
2325	2325	entered into an agreement with the applicant to secure the loan. 2
2326	2326
2327	2327	(2) A loan that the [Authority] DEPARTMENT makes shall mature not 3
2328	2328	later than the term of the contract, unless the [Authority] DEPARTMENT finds that a 4
2329	2329	longer term better serves the purposes of this part. 5
2330	2330
2331	2331	(d) In providing financial assistance under this section, the [Authority] 6
2332	2332	DEPARTMENT shall recognize the need to serve applicants from all political subdivisions 7
2333	2333	in the State. 8
2334	2334
2335	2335	[5–526.] 5–515. 9
2336	2336
2337	2337	(a) If the applicant is an individual, to qualify for financial assistance under this 10
2338	2338	part the applicant shall satisfy the [Authority] DEPARTMENT that: 11
2339	2339
2340	2340	(1) the applicant is of good moral character; 12
2341	2341
2342	2342	(2) the applicant has a reputation for financial responsibility, as 13
2343	2343	determined from creditors, employers, and other individuals who have personal knowledge 14
2344	2344	of the applicant; 15
2345	2345
2346	2346	(3) the applicant is a resident of the State or the principal place of business 16
2347	2347	of the applicant is in the State; and 17
2348	2348
2349	2349	(4) the applicant is unable to obtain adequate business financing on 18
2350	2350	reasonable terms through normal lending channels because the applicant: 19
2351	2351
2352	2352	(i) belongs to a group that historically has been deprived of access 20
2353	2353	to normal economic or financial resources [because of race, color, creed, sex, religion, or 21
2354	2354	national origin]; 22
2355	2355
2356	2356	(ii) has an identifiable physical handicap that severely limits the 23
2357	2357	ability of the applicant to obtain financial assistance, but that does not limit the ability of 24
2358	2358	the applicant to perform the contract or other activity for which the applicant would be 25
2359	2359	receiving financial assistance; 26
2360	2360
2361	2361	(iii) has any other social or economic impediment that is beyond the 27
2362	2362	control of the applicant but that does not limit the ability of the applicant to perform the 28
2363	2363	contract or other activity for which the applicant would be receiving financial assistance, 29
2364	2364	including: 30
2365	2365
2366	2366	1. the lack of formal education or financial capacity; or 31
2367	2367
2368	2368	2. geographical or regional economic distress; or 32
2369	2369	50 HOUSE BILL 498
2370	2370
2371	2371
2372	2372	(iv) does not meet the established credit criteria of at least one 1
2373	2373	financial institution. 2
2374	2374
2375	2375	(b) If the applicant is a business enterprise that is not a sole proprietorship, to 3
2376	2376	qualify for financial assistance under this part at least 70% of the business enterprise shall 4
2377	2377	be owned by individuals who meet the qualifications for an individual applicant under 5
2378	2378	subsection (a) of this section. 6
2379	2379
2380	2380	(c) An applicant for a loan guaranty shall have applied for and been denied a loan 7
2381	2381	by a financial institution. 8
2382	2382
2383	2383	[5–527.] 5–516. 9
2384	2384
2385	2385	(a) To apply for financial assistance from the Fund under [§ 5–525] § 5–514 of 10
2386	2386	this subtitle, an applicant shall submit to the [Authority] DEPARTMENT an application on 11
2387	2387	the form that the [Authority] DEPARTMENT provides WITH THE INFORMATION THE 12
2388	2388	DEPARTMENT REQUIRES . 13
2389	2389
2390	2390	[(b) The application shall: 14
2391	2391
2392	2392	(1) describe the project in detail; 15
2393	2393
2394	2394	(2) itemize known and estimated costs; 16
2395	2395
2396	2396	(3) specify the total amount of investment required to perform the contract; 17
2397	2397
2398	2398	(4) specify the amount of funds available to the applicant without financial 18
2399	2399	assistance from the Authority; 19
2400	2400
2401	2401	(5) specify the amount of financial assistance requested from the 20
2402	2402	Authority; 21
2403	2403
2404	2404	(6) provide information that demonstrates the inability of the applicant to 22
2405	2405	obtain adequate financing on reasonable terms through normal lending channels; 23
2406	2406
2407	2407	(7) provide information that demonstrates the financial status of the 24
2408	2408	applicant, including: 25
2409	2409
2410	2410	(i) a current balance sheet; 26
2411	2411
2412	2412	(ii) a profit and loss statement; and 27
2413	2413
2414	2414	(iii) credit references; and 28
2415	2415
2416	2416	(8) contain any other relevant information that the Authority requires.] 29
2417	2417	HOUSE BILL 498 51
2418	2418
2419	2419
2420	2420	[(c)] (B) The [Authority] DEPARTMENT may require an applicant to provide an 1
2421	2421	audited balance sheet before the [Authority] DEPARTMENT approves or denies the 2
2422	2422	application. 3
2423	2423
2424	2424	[(d) The Authority may delegate the review and approval of the application 4
2425	2425	information required under subsection (b)(1), (2), and (3) of this section to the Executive 5
2426	2426	Director if an applicant meets all other requirements of this section.] 6
2427	2427
2428	2428	[5–528.] 5–517. 7
2429	2429
2430	2430	(a) The [Authority] DEPARTMENT may set the terms and conditions for a loan 8
2431	2431	guaranty made under [§ 5–525(a)] § 5–514(A) of this subtitle. 9
2432	2432
2433	2433	(b) (1) If the [Authority] DEPARTMENT decides to lend money from the Fund 10
2434	2434	to an applicant under [§ 5–525(c)] § 5–514(C) of this subtitle, the [Authority] 11
2435	2435	DEPARTMENT shall prepare loan documents that include: 12
2436	2436
2437	2437	(i) the interest rate on the loan that equals the market rate for a 13
2438	2438	conventional loan of comparable risk unless the [Authority] DEPARTMENT determines 14
2439	2439	that a lower rate better serves the purposes of this subtitle; 15
2440	2440
2441	2441	(ii) a disbursement schedule that provides enough money to the 16
2442	2442	applicant when the applicant needs it to perform the contract; 17
2443	2443
2444	2444	(iii) a requirement that the applicant and the [Authority] 18
2445	2445	DEPARTMENT co–sign each request for an advance of money before release of the money; 19
2446	2446	and 20
2447	2447
2448	2448	(iv) provisions for repayment of the loan. 21
2449	2449
2450	2450	(2) The loan documents may include any other provision that the 22
2451	2451	[Authority] DEPARTMENT determines is necessary to secure the loan, including an 23
2452	2452	assignment of or a lien on payment under the contract. 24
2453	2453
2454	2454	[5–529. 25
2455	2455
2456	2456	The Treasurer shall report each year to the Authority on: 26
2457	2457
2458	2458	(1) the status of the money invested under § 5–521 of this subtitle; 27
2459	2459
2460	2460	(2) the market value of the assets in the Fund as of the date of the report; 28
2461	2461	and 29
2462	2462
2463	2463	(3) the interest received from investments during the period covered by the 30
2464	2464	report.] 31
2465	2465	52 HOUSE BILL 498
2466	2466
2467	2467
2468	2468	[5–530.] 5–518. 1
2469	2469
2470	2470	(a) A person may not knowingly make or cause to be made a false statement or 2
2471	2471	report in an application or document submitted to the [Authority] DEPARTMENT under 3
2472	2472	this part. 4
2473	2473
2474	2474	(b) A person may not knowingly make or cause to be made a false statement or 5
2475	2475	report to influence an action of the [Authority] DEPARTMENT under this part: 6
2476	2476
2477	2477	(1) on an application for financial assistance; or 7
2478	2478
2479	2479	(2) affecting financial assistance whether or not the assistance has already 8
2480	2480	been extended. 9
2481	2481
2482	2482	(c) A person who violates this section is guilty of a misdemeanor and on conviction 10
2483	2483	is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 11
2484	2484
2485	2485	5–519. RESERVED. 12
2486	2486
2487	2487	5–520. RESERVED. 13
2488	2488
2489	2489	Part IV. Small Business Development Guaranty [Fund] PROGRAM. 14
2490	2490
2491	2491	[5–533.] 5–521. 15
2492	2492
2493	2493	In this part, [“Fund”] “PROGRAM” means the Small Business Development 16
2494	2494	Guaranty [Fund] PROGRAM. 17
2495	2495
2496	2496	[5–534.] 5–522. 18
2497	2497
2498	2498	There is a Small Business Development Guaranty PROGRAM WITHIN THE Fund. 19
2499	2499
2500	2500	[5–535. 20
2501	2501
2502	2502	The Authority shall use the Fund to implement this part.] 21
2503	2503
2504	2504	[5–536. 22
2505	2505
2506	2506	The Authority shall administer the Fund.] 23
2507	2507
2508	2508	[5–537. 24
2509	2509
2510	2510	(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 25
2511	2511	§ 7–302 of the State Finance and Procurement Article. 26
2512	2512
2513	2513	(b) The Treasurer shall: 27 HOUSE BILL 498 53
2514	2514
2515	2515
2516	2516
2517	2517	(1) invest the money in the Fund in the same manner as other State money 1
2518	2518	may be invested; and 2
2519	2519
2520	2520	(2) credit any investment earnings to the Fund. 3
2521	2521
2522	2522	(c) If the Authority determines by resolution that any money in the Fund is no 4
2523	2523	longer needed to meet its obligations, the Authority may authorize the Comptroller to first 5
2524	2524	apply that money to pay the principal of and interest on outstanding bonds issued under 6
2525	2525	any Act authorizing the issue of State general obligation bonds issued to implement this 7
2526	2526	subtitle.] 8
2527	2527
2528	2528	[5–538. 9
2529	2529
2530	2530	The Fund consists of: 10
2531	2531
2532	2532	(1) loans and grants from the federal government or a unit or 11
2533	2533	instrumentality of the federal government; 12
2534	2534
2535	2535	(2) grants and contributions of funds from the State, a political subdivision, 13
2536	2536	or any other source; 14
2537	2537
2538	2538	(3) premiums for guaranteeing long–term loans under § 5–540 of this 15
2539	2539	subtitle; 16
2540	2540
2541	2541	(4) proceeds from the sale, disposition, lease, or rental of collateral by the 17
2542	2542	Authority relating to loans guaranteed under § 5–540 of this subtitle; and 18
2543	2543
2544	2544	(5) all other receipts of the Authority under this part.] 19
2545	2545
2546	2546	[5–539.] 5–523. 20
2547	2547
2548	2548	The [Authority] DEPARTMENT may use the Fund for: 21
2549	2549
2550	2550	(1) guaranty payments made under [§ 5–540(a)] § 5–524(A) of this 22
2551	2551	subtitle; 23
2552	2552
2553	2553	(2) interest subsidy payments under [§ 5–540(b)] § 5–524(B) of this 24
2554	2554	subtitle; and 25
2555	2555
2556	2556	(3) expenses for administrative, legal, actuarial, and other services. 26
2557	2557
2558	2558	[5–540.] 5–524. 27
2559	2559
2560	2560	(a) (1) The [Authority] DEPARTMENT may use the Fund to guarantee up to 28
2561	2561	80% of the principal of and interest on a long–term loan made by a financial institution to 29 54 HOUSE BILL 498
2562	2562
2563	2563
2564	2564	an applicant only if: 1
2565	2565
2566	2566	(i) the applicant meets the requirements under [§ 5–541] § 5–525 2
2567	2567	of this subtitle and has not violated [§ 5–545] § 5–528 of this subtitle; 3
2568	2568
2569	2569	(ii) the loan amount is $5,000 or more and the maximum amount 4
2570	2570	payable by the [Authority] DEPARTMENT under the guaranty does not exceed 5
2571	2571	[$2,000,000] $3,000,000; 6
2572	2572
2573	2573	(iii) the loan is used for: 7
2574	2574
2575	2575	1. working capital; 8
2576	2576
2577	2577	2. refinancing the applicant’s existing debt; 9
2578	2578
2579	2579	3. acquisition and installation of equipment; 10
2580	2580
2581	2581	4. making necessary improvements to real property that the 11
2582	2582	applicant leases or owns in fee simple; or 12
2583	2583
2584	2584	5. acquiring real property that the applicant will own in fee 13
2585	2585	simple if the property is to be used in the applicant’s trade or business for which the 14
2586	2586	guaranty is sought and the financial institution or the [Authority] DEPARTMENT places a 15
2587	2587	lien on the property; 16
2588	2588
2589	2589	(iv) the loan matures within 10 years after the closing date of the 17
2590	2590	loan; and 18
2591	2591
2592	2592	(v) the interest rate does not exceed the monthly weighted average 19
2593	2593	of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 20
2594	2594	2%, as determined by the [Authority] DEPARTMENT . 21
2595	2595
2596	2596	(2) (i) The [Authority] DEPARTMENT may only approve a guaranty 22
2597	2597	under this section if the [Authority] DEPARTMENT determines that the loan to be 23
2598	2598	guaranteed will have a substantial economic impact. 24
2599	2599
2600	2600	(ii) To determine the economic impact of a loan, the [Authority] 25
2601	2601	DEPARTMENT may consider: 26
2602	2602
2603	2603	1. the amount of the guaranty obligation; 27
2604	2604
2605	2605	2. the terms of the loan to be guaranteed; 28
2606	2606
2607	2607	3. the number of new jobs that the loan will create; and 29
2608	2608
2609	2609	4. any other factor that the [Authority] DEPARTMENT 30 HOUSE BILL 498 55
2610	2610
2611	2611
2612	2612	considers relevant. 1
2613	2613
2614	2614	(b) (1) In addition to a loan guaranty, the [Authority] DEPARTMENT may 2
2615	2615	provide an interest subsidy for the benefit of the applicant. 3
2616	2616
2617	2617	(2) The subsidy: 4
2618	2618
2619	2619	(i) may be for the life of the loan; 5
2620	2620
2621	2621	(ii) may not exceed 4%; 6
2622	2622
2623	2623	(iii) shall be payable quarterly; and 7
2624	2624
2625	2625	(iv) shall be made to the financial institution that makes the loan 8
2626	2626	that the [Authority] DEPARTMENT guarantees. 9
2627	2627
2628	2628	(3) (i) The subsidy may not exceed the difference between: 10
2629	2629
2630	2630	1. the interest rate on the guaranteed loan; and 11
2631	2631
2632	2632	2. the discount interest rate that the Federal Reserve Bank 12
2633	2633	uses. 13
2634	2634
2635	2635	(ii) The interest rate may not exceed the monthly weighted average 14
2636	2636	of the prime lending rate that prevails in Baltimore City on unsecured commercial loans, 15
2637	2637	as the [Authority] DEPARTMENT determines as of the date of closing, plus 2%. 16
2638	2638
2639	2639	(4) The subsidy may not be paid during any period in which the loan is in 17
2640	2640	default. 18
2641	2641
2642	2642	(c) In providing financial assistance under this section, the [Authority] 19
2643	2643	DEPARTMENT shall recognize the need to serve applicants from all political subdivisions 20
2644	2644	in the State. 21
2645	2645
2646	2646	[5–541.] 5–525. 22
2647	2647
2648	2648	(a) If the applicant is a sole proprietor, to qualify for financial assistance under 23
2649	2649	this part the applicant shall satisfy the [Authority] DEPARTMENT that: 24
2650	2650
2651	2651	(1) the applicant is of good moral character; 25
2652	2652
2653	2653	(2) the applicant has a reputation for financial responsibility, as 26
2654	2654	determined from creditors, employers, and other individuals who have personal knowledge 27
2655	2655	of the applicant; 28
2656	2656
2657	2657	(3) the applicant is a resident of the State or the principal place of business 29 56 HOUSE BILL 498
2658	2658
2659	2659
2660	2660	of the applicant is in the State; and 1
2661	2661
2662	2662	(4) the applicant is unable to obtain adequate business financing on 2
2663	2663	reasonable terms through normal lending channels because the applicant: 3
2664	2664
2665	2665	(i) belongs to a group that historically has been deprived of access 4
2666	2666	to normal economic or financial resources [because of race, color, creed, sex, religion, or 5
2667	2667	national origin]; 6
2668	2668
2669	2669	(ii) has an identifiable physical handicap that severely limits the 7
2670	2670	ability of the applicant to obtain financial assistance, but that does not limit the ability of 8
2671	2671	the applicant to perform the contract or other activity for which the applicant would be 9
2672	2672	receiving financial assistance; 10
2673	2673
2674	2674	(iii) has any other social or economic impediment that is beyond the 11
2675	2675	control of the applicant, but that does not limit the ability of the applicant to perform the 12
2676	2676	contract or other activity for which the applicant would be receiving financial assistance, 13
2677	2677	including: 14
2678	2678
2679	2679	1. the lack of formal education or financial capacity; or 15
2680	2680
2681	2681	2. geographical or regional economic distress; or 16
2682	2682
2683	2683	(iv) does not meet the established credit criteria of at least one 17
2684	2684	financial institution. 18
2685	2685
2686	2686	(b) If the applicant is not a sole proprietorship, to qualify for financial assistance 19
2687	2687	under this part at least 70% of the business enterprise shall be owned by individuals who 20
2688	2688	meet the qualifications for an individual applicant under subsection (a) of this section. 21
2689	2689
2690	2690	(c) An applicant for a loan guaranty shall have applied for and been denied a loan 22
2691	2691	by a financial institution. 23
2692	2692
2693	2693	[5–542.] 5–526. 24
2694	2694
2695	2695	(a) To apply for financial assistance from the Fund, a financial institution shall 25
2696	2696	submit to the [Authority] DEPARTMENT an application on the form that the [Authority] 26
2697	2697	DEPARTMENT provides WITH THE INFORMATION THE DEPARTMENT REQUIRES . 27
2698	2698
2699	2699	[(b) The application shall include: 28
2700	2700
2701	2701	(1) a detailed description of the proposed use of the loan proceeds, including 29
2702	2702	projected cash flow analyses, marketing plans, and appraisals; 30
2703	2703
2704	2704	(2) a detailed description of the funds available to the applicant; 31
2705	2705	HOUSE BILL 498 57
2706	2706
2707	2707
2708	2708	(3) a detailed description of the proposed loan documents to be executed by 1
2709	2709	the financial institution and the applicant; 2
2710	2710
2711	2711	(4) a detailed description of the property proposed as collateral for the loan 3
2712	2712	and the financial institution’s certification of the property’s value; 4
2713	2713
2714	2714	(5) information that demonstrates the inability of the applicant to obtain 5
2715	2715	adequate financing on reasonable terms through normal lending channels; 6
2716	2716
2717	2717	(6) information that demonstrates the financial status of the applicant, 7
2718	2718	including: 8
2719	2719
2720	2720	(i) a current balance sheet; 9
2721	2721
2722	2722	(ii) a profit and loss statement; and 10
2723	2723
2724	2724	(iii) credit references; 11
2725	2725
2726	2726	(7) a proposed disbursement schedule; 12
2727	2727
2728	2728	(8) a proposed amortization schedule; 13
2729	2729
2730	2730	(9) a detailed description of the applicant’s experience in the trade or 14
2731	2731	business for which the loan and guarantee are requested; 15
2732	2732
2733	2733	(10) information that shows that the applicant satisfies the requirements of 16
2734	2734	§ 5–541 of this subtitle; and 17
2735	2735
2736	2736	(11) any other relevant information that the Authority requests.] 18
2737	2737
2738	2738	[(c)] (B) The [Authority] DEPARTMENT may require an applicant to provide an 19
2739	2739	audit report and balance sheet certified by an independent certified public accountant in 20
2740	2740	accordance with generally accepted accounting principles before the [Authority] 21
2741	2741	DEPARTMENT approves or denies the application. 22
2742	2742
2743	2743	[5–543.] 5–527. 23
2744	2744
2745	2745	A guaranty shall contain terms and conditions that the [Authority] DEPARTMENT 24
2746	2746	determines to be appropriate. 25
2747	2747
2748	2748	[5–544. 26
2749	2749
2750	2750	The Treasurer shall report each year to the Authority on: 27
2751	2751
2752	2752	(1) the status of the money invested under § 5–537 of this subtitle; 28
2753	2753	58 HOUSE BILL 498
2754	2754
2755	2755
2756	2756	(2) the market value of the assets in the Fund as of the date of the report; 1
2757	2757	and 2
2758	2758
2759	2759	(3) the interest received from investments during the period covered by the 3
2760	2760	report.] 4
2761	2761
2762	2762	[5–545.] 5–528. 5
2763	2763
2764	2764	(a) A person may not knowingly make or cause to be made a false statement or 6
2765	2765	report in an application or document submitted to the [Authority] DEPARTMENT under 7
2766	2766	this part. 8
2767	2767
2768	2768	(b) A person may not knowingly make or cause to be made a false statement or 9
2769	2769	report to influence an action of the [Authority] DEPARTMENT under this part: 10
2770	2770
2771	2771	(1) on an application for financial assistance; or 11
2772	2772
2773	2773	(2) affecting financial assistance whether or not the assistance has already 12
2774	2774	been extended. 13
2775	2775
2776	2776	(c) A person who violates this section is guilty of a misdemeanor and on conviction 14
2777	2777	is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 15
2778	2778
2779	2779	[5–546.] 5–529. 16
2780	2780
2781	2781	If an applicant or financial institution violates any provision of the loan documents 17
2782	2782	or ceases to meet the requirements of this part, on reasonable notice to the applicant or 18
2783	2783	financial institution, the [Authority] DEPARTMENT may: 19
2784	2784
2785	2785	(1) withhold from the applicant further loan payments until the applicant 20
2786	2786	complies with the documents or requirements; 21
2787	2787
2788	2788	(2) withhold from the financial institution further interest subsidy 22
2789	2789	payments until the financial institution complies with the loan documents or requirements; 23
2790	2790	and 24
2791	2791
2792	2792	(3) exercise any other remedy for which the loan documents provide. 25
2793	2793
2794	2794	5–530. RESERVED. 26
2795	2795
2796	2796	5–531. RESERVED. 27
2797	2797
2798	2798	Part V. Equity Participation Investment Program. 28
2799	2799
2800	2800	[5–549.] 5–532. 29
2801	2801	HOUSE BILL 498 59
2802	2802
2803	2803
2804	2804	(a) In this part the following words have the meanings indicated. 1
2805	2805
2806	2806	(b) (1) “Enterprise” means a business entity proposing to carry on a business 2
2807	2807	in the State that meets the requirements of [§ 5–526] § 5–515 of this subtitle. 3
2808	2808
2809	2809	(2) “Enterprise” includes: 4
2810	2810
2811	2811	(i) a sole proprietorship; 5
2812	2812
2813	2813	(ii) a partnership; 6
2814	2814
2815	2815	(III) A LIMITED LIABILITY CO RPORATION; 7
2816	2816
2817	2817	[(iii)] (IV) a limited partnership; 8
2818	2818
2819	2819	[(iv)] (V) a corporation; or 9
2820	2820
2821	2821	[(v)] (VI) a joint venture. 10
2822	2822
2823	2823	(c) “Equity participation financing” includes investment or guaranty of 11
2824	2824	investment in an enterprise. 12
2825	2825
2826	2826	(d) “Existing business” means a business whose board of directors or owners 13
2827	2827	approve the sale of the business to an enterprise receiving equity participation financing. 14
2828	2828
2829	2829	(e) [“Fund” means the Equity Participation Investment Program Fund. 15
2830	2830
2831	2831	(f)] “Program” means the Equity Participation Investment Program. 16
2832	2832
2833	2833	[(g)] (F) “Qualified security” means: 17
2834	2834
2835	2835	(1) a note, bond, debenture, or other evidence of indebtedness; 18
2836	2836
2837	2837	(2) stock or other form of equity participation; 19
2838	2838
2839	2839	(3) a certificate of interest or participation in a profit–sharing agreement; 20
2840	2840
2841	2841	(4) an investment contract; 21
2842	2842
2843	2843	(5) a certificate of deposit for a security; 22
2844	2844
2845	2845	(6) a certificate of interest or participation in a patent or patent application 23
2846	2846	or in royalty or other payments under a patent or patent application; or 24
2847	2847
2848	2848	(7) an interest or instrument commonly known as a “security” or a 25
2849	2849	certificate for, receipt for, guaranty of, or option, warrant, or right to subscribe to or 26 60 HOUSE BILL 498
2850	2850
2851	2851
2852	2852	purchase a qualified security. 1
2853	2853
2854	2854	[(h)] (G) “Small business” means a business that is classified as a small business 2
2855	2855	under the U.S. Small Business Administration size standards. 3
2856	2856
2857	2857	[5–550.] 5–533. 4
2858	2858
2859	2859	(a) The General Assembly finds that: 5
2860	2860
2861	2861	(1) small businesses have proven to be a fast growing and reliable form of 6
2862	2862	successful business expansion and successful new business creation; 7
2863	2863
2864	2864	(2) small businesses play a major role in the economy of the State and have 8
2865	2865	been a continuing source of increasing tax revenues and job opportunities; 9
2866	2866
2867	2867	(3) the growth of small businesses should be encouraged and should be an 10
2868	2868	integral part of the State’s economic development effort; 11
2869	2869
2870	2870	(4) socially or economically disadvantaged individuals often lack adequate 12
2871	2871	capital and are unable to obtain financing from financial institutions or venture capital 13
2872	2872	firms to begin and develop a small business, or to purchase an existing business; and 14
2873	2873
2874	2874	(5) promoting the creation and viability of small businesses and the 15
2875	2875	purchase of existing businesses by socially or economically disadvantaged individuals is in 16
2876	2876	the public interest. 17
2877	2877
2878	2878	(b) The purposes of the Equity Participation Investment Program are to: 18
2879	2879
2880	2880	(1) encourage and help socially or economically disadvantaged individuals 19
2881	2881	to create and develop small businesses and acquire existing businesses in the State; and 20
2882	2882
2883	2883	(2) assist small businesses that, because they do not meet the established 21
2884	2884	credit criteria of financial institutions, cannot obtain adequate business financing on 22
2885	2885	reasonable terms through normal financing channels. 23
2886	2886
2887	2887	[5–551.] 5–534. 24
2888	2888
2889	2889	There is an Equity Participation Investment Program in the [Department] FUND. 25
2890	2890
2891	2891	[5–552. 26
2892	2892
2893	2893	The Authority shall administer the Program.] 27
2894	2894
2895	2895	[5–553.] 5–535. 28
2896	2896
2897	2897	The [Authority] DEPARTMENT may: 29 HOUSE BILL 498 61
2898	2898
2899	2899
2900	2900
2901	2901	(1) provide equity participation financing to help socially or economically 1
2902	2902	disadvantaged individuals in the State create and develop small businesses and acquire 2
2903	2903	existing businesses; 3
2904	2904
2905	2905	(2) buy, hold, and sell qualified securities; 4
2906	2906
2907	2907	(3) prepare, publish, and distribute technical studies, reports, and other 5
2908	2908	materials with or without charge; and 6
2909	2909
2910	2910	(4) provide and pay for advisory services and technical assistance that are 7
2911	2911	necessary or desirable to carry out the Program. 8
2912	2912
2913	2913	[5–554. 9
2914	2914
2915	2915	There is an Equity Participation Investment Program Fund.] 10
2916	2916
2917	2917	[5–555.] 5–536. 11
2918	2918
2919	2919	[(a) The Authority shall administer the Fund. 12
2920	2920
2921	2921	(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 13
2922	2922	under § 7–302 of the State Finance and Procurement Article. 14
2923	2923
2924	2924	(2) The Treasurer shall hold the Fund separately, and the Comptroller 15
2925	2925	shall account for the Fund. 16
2926	2926
2927	2927	(c) The Fund consists of: 17
2928	2928
2929	2929	(1) money drawn from the Small Business Development Guaranty Fund 18
2930	2930	established under Part IV of this subtitle; 19
2931	2931
2932	2932	(2) money the State appropriates to the Fund; 20
2933	2933
2934	2934	(3) money made available to the Fund through federal programs or private 21
2935	2935	contributions; 22
2936	2936
2937	2937	(4) proceeds from the sale, disposition, lease, or rental by the Authority of 23
2938	2938	collateral related to equity participation financing; 24
2939	2939
2940	2940	(5) premiums, fees, royalties, and repayments of principal, interest, and 25
2941	2941	investments paid by and on behalf of enterprises to the Authority under the terms of equity 26
2942	2942	participation financing; and 27
2943	2943
2944	2944	(6) any other money made available under the Program. 28
2945	2945
2946	2946	(d)] The [Authority] DEPARTMENT shall use the Fund to: 29 62 HOUSE BILL 498
2947	2947
2948	2948
2949	2949
2950	2950	(1) purchase qualified securities that an enterprise issues to provide equity 1
2951	2951	participation financing as the Program allows; 2
2952	2952
2953	2953	(2) provide guaranties of investments to expand the capital resources of 3
2954	2954	enterprises; 4
2955	2955
2956	2956	(3) purchase advisory services and technical assistance consistent with the 5
2957	2957	Program; 6
2958	2958
2959	2959	(4) purchase securities in which a fiduciary of the State may lawfully 7
2960	2960	invest; 8
2961	2961
2962	2962	(5) provide equity participation financing as the Program allows; and 9
2963	2963
2964	2964	(6) pay for administrative, legal, and actuarial services that relate to the 10
2965	2965	Program. 11
2966	2966
2967	2967	[(e) The Fund shall be self–sustaining and shall achieve investment returns on its 12
2968	2968	portfolio in the form of: 13
2969	2969
2970	2970	(1) royalties from enterprises in amounts to be determined by the 14
2971	2971	Authority; and 15
2972	2972
2973	2973	(2) interest payments from any debt securities. 16
2974	2974
2975	2975	(f) As needed for the Program, the Authority may withdraw from time to time up 17
2976	2976	to a total of $2,000,000 from the Small Business Development Guaranty Fund and deposit 18
2977	2977	the withdrawal into the Fund. 19
2978	2978
2979	2979	(g) (1) The Treasurer shall invest the money of the Fund in the same manner 20
2980	2980	as other State money may be invested. 21
2981	2981
2982	2982	(2) Any investment earnings of the Fund shall be paid into the Fund. 22
2983	2983
2984	2984	(h) In accordance with § 2.5–109 of this article, the Authority shall submit a 23
2985	2985	report on the Program.] 24
2986	2986
2987	2987	[5–556.] 5–537. 25
2988	2988
2989	2989	[(a)] The [Authority] DEPARTMENT may provide equity participation financing 26
2990	2990	under the Program only after the enterprise submits an application [that contains a 27
2991	2991	business plan that meets the requirements of subsection (b) of this section] ON THE FORM 28
2992	2992	THAT THE DEPARTMENT PROVIDES W ITH THE INFORMATION THE DEPARTMENT 29
2993	2993	REQUIRES. 30
2994	2994	HOUSE BILL 498 63
2995	2995
2996	2996
2997	2997	[(b) The business plan of an enterprise shall include: 1
2998	2998
2999	2999	(1) a description of the small business or existing business and its 2
3000	3000	management, product, and market; 3
3001	3001
3002	3002	(2) a statement of the amount, immediacy of need, and projected use of the 4
3003	3003	capital required; 5
3004	3004
3005	3005	(3) a statement of the potential economic impact of the purchase; 6
3006	3006
3007	3007	(4) information that relates to the satisfaction of the applicant’s 7
3008	3008	requirements of § 5–557(d) and (e) of this subtitle; and 8
3009	3009
3010	3010	(5) any other information the Authority requires.] 9
3011	3011
3012	3012	[5–557.] 5–538. 10
3013	3013
3014	3014	(a) (1) Under the Program the [Authority] DEPARTMENT may not: 11
3015	3015
3016	3016	(i) own securities representing more than 49% of the voting stock of 12
3017	3017	a small business or own an interest greater than 49% in a small business; or 13
3018	3018
3019	3019	(ii) own securities representing more than 49% of the voting stock of 14
3020	3020	an enterprise acquiring an existing business or own an interest greater than 49% in an 15
3021	3021	enterprise acquiring an existing business. 16
3022	3022
3023	3023	(2) The amount of the [Authority’s] DEPARTMENT ’S equity participation 17
3024	3024	financing in an enterprise may not exceed $2,000,000. 18
3025	3025
3026	3026	(3) Before providing equity participation financing, the [Authority] 19
3027	3027	DEPARTMENT shall find that there is a reasonable probability that the [Authority] 20
3028	3028	DEPARTMENT will recover its initial investment and an adequate return on investment 21
3029	3029	from the equity participation financing. 22
3030	3030
3031	3031	(4) The [Authority’s] DEPARTMENT ’S investment shall be recoverable 23
3032	3032	within 7 years after the equity participation financing. 24
3033	3033
3034	3034	(5) The [Authority’s] DEPARTMENT ’S recovery shall be the greater of: 25
3035	3035
3036	3036	(i) the current value of the percentage of the equity investment in 26
3037	3037	the enterprise; or 27
3038	3038
3039	3039	(ii) the amount of the initial investment in the enterprise. 28
3040	3040
3041	3041	(6) If there is a dispute between the borrower and the [Authority] 29
3042	3042	DEPARTMENT as to the value of the business entity at the time of recovery, the value shall 30 64 HOUSE BILL 498
3043	3043
3044	3044
3045	3045	be determined after obtaining at least one independent appraisal of the value from an 1
3046	3046	appraiser selected from a list of at least three appraisers supplied by the [Authority] 2
3047	3047	DEPARTMENT . 3
3048	3048
3049	3049	(b) When an enterprise applies to the [Authority] DEPARTMENT for equity 4
3050	3050	participation financing to acquire an existing business, an enterprise or its principals shall 5
3051	3051	have: 6
3052	3052
3053	3053	(1) an equity investment equal to at least 5% of the total cost of acquisition; 7
3054	3054	and 8
3055	3055
3056	3056	(2) at least 3 years of successful experience with demonstrated 9
3057	3057	achievements and management responsibilities. 10
3058	3058
3059	3059	(c) The [Authority] DEPARTMENT may provide equity participation financing 11
3060	3060	for the acquisition of an existing business if the existing business: 12
3061	3061
3062	3062	(1) has been in existence for at least 5 years; 13
3063	3063
3064	3064	(2) has been profitable for at least 2 of the previous 3 years; 14
3065	3065
3066	3066	(3) has sufficient cash flow to service the debt and ensure adequate return 15
3067	3067	of the [Authority’s] DEPARTMENT ’S investment; 16
3068	3068
3069	3069	(4) has the capacity for growth and job creation; 17
3070	3070
3071	3071	(5) has its principal place of business in the State; and 18
3072	3072
3073	3073	(6) has a strong customer base. 19
3074	3074
3075	3075	(d) If the applicant enterprise is a sole proprietorship, to qualify for financial 20
3076	3076	assistance under this part, the applicant shall satisfy the [Authority] DEPARTMENT that: 21
3077	3077
3078	3078	(1) the applicant is of good moral character; 22
3079	3079
3080	3080	(2) the applicant has a reputation for financial responsibility, as 23
3081	3081	determined from creditors, employers, and other individuals who have personal knowledge 24
3082	3082	of the applicant; 25
3083	3083
3084	3084	(3) the applicant is a resident of the State or the principal place of business 26
3085	3085	of the applicant is in the State; and 27
3086	3086
3087	3087	(4) the applicant is unable to obtain adequate business financing on 28
3088	3088	reasonable terms through normal lending channels because the applicant: 29
3089	3089
3090	3090	(i) belongs to a group that historically has been deprived of access 30 HOUSE BILL 498 65
3091	3091
3092	3092
3093	3093	to normal economic or financial resources [because of race, color, creed, sex, religion, or 1
3094	3094	national origin]; 2
3095	3095
3096	3096	(ii) has an identifiable physical handicap that severely limits the 3
3097	3097	ability of the applicant to obtain financial assistance, but that does not limit the ability of 4
3098	3098	the applicant to perform the contract or other activity for which the applicant would be 5
3099	3099	receiving financial assistance; 6
3100	3100
3101	3101	(iii) has any other social or economic impediment that is beyond the 7
3102	3102	control of the applicant, but that does not limit the ability of the applicant to perform the 8
3103	3103	contract or other activity for which the applicant would be receiving financial assistance, 9
3104	3104	including: 10
3105	3105
3106	3106	1. the lack of formal education or financial capacity; or 11
3107	3107
3108	3108	2. geographical or regional economic distress; or 12
3109	3109
3110	3110	(iv) does not meet the established credit or investment criteria of at 13
3111	3111	least one financial institution. 14
3112	3112
3113	3113	(e) If the applicant enterprise is not a sole proprietorship, to qualify for financial 15
3114	3114	assistance under this part, at least 51% of the enterprise shall be owned by individuals who 16
3115	3115	meet the qualifications for applicants under subsection (d) of this section. 17
3116	3116
3117	3117	[5–558.] 5–539. 18
3118	3118
3119	3119	The liability of the State and of the [Authority] DEPARTMENT in providing equity 19
3120	3120	participation financing is limited to investments under the Program. 20
3121	3121
3122	3122	[5–559. 21
3123	3123
3124	3124	(a) This section applies to financing provided under the Program during fiscal 22
3125	3125	years 2021 and 2022 for the purpose of relieving the adverse effects of the coronavirus 23
3126	3126	pandemic. 24
3127	3127
3128	3128	(b) The Authority may convert to a grant up to $50,000 of the financing described 25
3129	3129	under subsection (a) of this section that is provided to a small business.] 26
3130	3130
3131	3131	5–540. RESERVED. 27
3132	3132
3133	3133	5–541. RESERVED. 28
3134	3134
3135	3135	Part VI. Small Business Surety Bond Program. 29
3136	3136
3137	3137	[5–561.] 5–542. 30
3138	3138	66 HOUSE BILL 498
3139	3139
3140	3140
3141	3141	(a) In this part the following words have the meanings indicated. 1
3142	3142
3143	3143	(b) [“Fund” means the Small Business Surety Bond Fund. 2
3144	3144
3145	3145	(c)] “Principal” means a small business entity that has assets, income, or 3
3146	3146	employees that do not exceed limits that the [Authority] DEPARTMENT sets by regulation. 4
3147	3147
3148	3148	[(d)] (C) “Program” means the Small Business Surety Bond Program. 5
3149	3149
3150	3150	[5–562.] 5–543. 6
3151	3151
3152	3152	There is a Small Business Surety Bond [Fund] PROGRAM WITHIN THE FUND. 7
3153	3153
3154	3154	[5–563. 8
3155	3155
3156	3156	(a) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 9
3157	3157	under § 7–302 of the State Finance and Procurement Article. 10
3158	3158
3159	3159	(2) The Treasurer shall hold the Fund separately, and the Comptroller 11
3160	3160	shall account for the Fund. 12
3161	3161
3162	3162	(b) (1) The Treasurer shall invest the money of the Fund in the same manner 13
3163	3163	as other State money may be invested. 14
3164	3164
3165	3165	(2) Any investment earnings of the Fund shall be credited to the Fund.] 15
3166	3166
3167	3167	[5–564. 16
3168	3168
3169	3169	The Fund consists of: 17
3170	3170
3171	3171	(1) money the State appropriates to the Fund; 18
3172	3172
3173	3173	(2) premiums, fees, and any other amounts the Authority receives with 19
3174	3174	respect to bonding assistance it provides; 20
3175	3175
3176	3176	(3) proceeds the Authority designates from the sale, lease, or other 21
3177	3177	disposition of property or contracts the Authority holds or acquires; and 22
3178	3178
3179	3179	(4) any other money available under the Program.] 23
3180	3180
3181	3181	[5–565. 24
3182	3182
3183	3183	The Fund shall be used: 25
3184	3184
3185	3185	(1) for the purposes described in the Program; and 26
3186	3186	HOUSE BILL 498 67
3187	3187
3188	3188
3189	3189	(2) to pay expenses of the Authority in administering the Program.] 1
3190	3190
3191	3191	[5–566.] 5–544. 2
3192	3192
3193	3193	In administering the Program, the [Authority] DEPARTMENT may: 3
3194	3194
3195	3195	(1) use the services of other governmental units; 4
3196	3196
3197	3197	(2) contract for and accept loans and grants from the federal government, 5
3198	3198	the State government, or a local government and their units; and 6
3199	3199
3200	3200	(3) on the terms and conditions it considers advisable: 7
3201	3201
3202	3202	(i) acquire, manage, operate, dispose of, or otherwise deal with 8
3203	3203	property; 9
3204	3204
3205	3205	(ii) take assignments of rentals and leases; and 10
3206	3206
3207	3207	(iii) make contracts, leases, agreements, and arrangements that are 11
3208	3208	necessary or incidental to the performance of its duties. 12
3209	3209
3210	3210	[5–567.] 5–545. 13
3211	3211
3212	3212	The [Authority] DEPARTMENT may: 14
3213	3213
3214	3214	(1) prescribe or approve the form of and terms and conditions in 15
3215	3215	applications, guaranty agreements, or any other documents entered into by the [Authority] 16
3216	3216	DEPARTMENT , principals, or sureties under the Program; 17
3217	3217
3218	3218	(2) acquire or take assignments of documents executed, obtained, or 18
3219	3219	delivered in connection with any assistance the [Authority] DEPARTMENT provides under 19
3220	3220	the Program; 20
3221	3221
3222	3222	(3) set and collect premiums, fees, charges, costs, and expenses in 21
3223	3223	connection with any assistance the [Authority] DEPARTMENT provides under the 22
3224	3224	Program; 23
3225	3225
3226	3226	(4) adopt regulations to carry out the Program; and 24
3227	3227
3228	3228	(5) do anything necessary or convenient to carry out its powers and the 25
3229	3229	purposes of the Program. 26
3230	3230
3231	3231	[5–568.] 5–546. 27
3232	3232
3233	3233	(a) The [Authority] DEPARTMENT may guarantee a surety up to the lesser of 28
3234	3234	90% or [$2,250,000] $3,000,000 of its loss under a bid bond, payment bond, or performance 29 68 HOUSE BILL 498
3235	3235
3236	3236
3237	3237	bond on a contract [financed by the federal government, a state government, a local 1
3238	3238	government, a private entity, or a utility that the Public Service Commission regulates]. 2
3239	3239
3240	3240	(b) The term of a guaranty under this part may not exceed the contract term, 3
3241	3241	including: 4
3242	3242
3243	3243	(1) the maintenance or warranty period required by the contract; and 5
3244	3244
3245	3245	(2) the period during which the surety may be liable for latent defects. 6
3246	3246
3247	3247	(c) The [Authority] DEPARTMENT may vary the terms and conditions of a 7
3248	3248	guaranty based on: 8
3249	3249
3250	3250	(1) the [Authority’s] DEPARTMENT ’S history of experience with a surety; 9
3251	3251	and 10
3252	3252
3253	3253	(2) any other factor the [Authority] DEPARTMENT considers relevant. 11
3254	3254
3255	3255	[5–569.] 5–547. 12
3256	3256
3257	3257	(a) The [Authority] DEPARTMENT may execute and perform a bid bond, 13
3258	3258	performance bond, and payment bond as a surety for the benefit of a principal in connection 14
3259	3259	with a contract [financed by the federal government or a state government, a local 15
3260	3260	government, a private entity, or a utility regulated by the Public Service Commission]. 16
3261	3261
3262	3262	(b) (1) This subsection does not apply if the sources of funding for the bonds 17
3263	3263	are grants. 18
3264	3264
3265	3265	(2) The bonds may not exceed [$2,500,000] $5,000,000 each. 19
3266	3266
3267	3267	(c) Bonds are subject to the approval of the [Authority] DEPARTMENT based on 20
3268	3268	the bond worthiness of the principal. 21
3269	3269
3270	3270	[5–570.] 5–548. 22
3271	3271
3272	3272	(a) The [Authority] DEPARTMENT may only approve a guaranty or a bond under 23
3273	3273	this part if the [Authority] DEPARTMENT determines that the contract, for which a bond 24
3274	3274	is sought to be guaranteed or issued, will have a substantial economic impact. 25
3275	3275
3276	3276	(b) To determine the economic impact of a contract, the [Authority] 26
3277	3277	DEPARTMENT may consider: 27
3278	3278
3279	3279	(1) the amount of the guaranty obligation; 28
3280	3280
3281	3281	(2) the terms of the bond to be guaranteed; 29
3282	3282	HOUSE BILL 498 69
3283	3283
3284	3284
3285	3285	(3) the number of new jobs that the contract to be bonded will create; and 1
3286	3286
3287	3287	(4) any other factor that the [Authority] DEPARTMENT considers 2
3288	3288	relevant. 3
3289	3289
3290	3290	[5–571.] 5–549. 4
3291	3291
3292	3292	The [Authority] DEPARTMENT may establish a surety bonding line to issue or 5
3293	3293	guarantee multiple bonds to a principal within preapproved terms, conditions, and 6
3294	3294	limitations. 7
3295	3295
3296	3296	[5–572.] 5–550. 8
3297	3297
3298	3298	(a) To qualify for financial assistance under this part the principal shall satisfy 9
3299	3299	the [Authority] DEPARTMENT that the principal: 10
3300	3300
3301	3301	(1) is of good moral character or is owned by individuals of good moral 11
3302	3302	character; 12
3303	3303
3304	3304	(2) as determined from creditors, employers, and other individuals who 13
3305	3305	have personal knowledge, is an individual with a reputation for financial responsibility or 14
3306	3306	is owned by individuals, a majority of whom have a reputation for financial responsibility; 15
3307	3307
3308	3308	(3) is a resident of the State or the principal place of business of the 16
3309	3309	applicant is in the State; and 17
3310	3310
3311	3311	(4) is unable to obtain adequate bonding on reasonable terms through 18
3312	3312	normal channels. 19
3313	3313
3314	3314	(b) To qualify for financial assistance under this part the principal shall certify to 20
3315	3315	the [Authority] DEPARTMENT , and the [Authority] DEPARTMENT shall be satisfied, 21
3316	3316	that: 22
3317	3317
3318	3318	(1) a bond is required to bid on a contract or to serve as prime contractor 23
3319	3319	or subcontractor; 24
3320	3320
3321	3321	(2) a bond cannot be obtained on reasonable terms and conditions without 25
3322	3322	assistance from the Program; and 26
3323	3323
3324	3324	(3) the principal will not subcontract more than 75% of the monetary value 27
3325	3325	of the contract. 28
3326	3326
3327	3327	[5–573.] 5–551. 29
3328	3328
3329	3329	(a) To apply for financial assistance from the Program under this part, a principal 30
3330	3330	and, if applicable, a surety shall submit to the [Authority] DEPARTMENT an application 31 70 HOUSE BILL 498
3331	3331
3332	3332
3333	3333	on the form that the [Authority] DEPARTMENT provides WITH THE INFORMATION THE 1
3334	3334	DEPARTMENT REQUIRES . 2
3335	3335
3336	3336	(b) [The application shall include: 3
3337	3337
3338	3338	(1) a detailed description of the project; 4
3339	3339
3340	3340	(2) an itemization of known and estimated costs; 5
3341	3341
3342	3342	(3) the total investment required to perform the contract; 6
3343	3343
3344	3344	(4) the working capital available to the principal; 7
3345	3345
3346	3346	(5) the bonding assistance sought; 8
3347	3347
3348	3348	(6) information that demonstrates the inability of the principal to obtain 9
3349	3349	adequate bonding on reasonable terms and conditions through normal channels without 10
3350	3350	assistance from the Program; 11
3351	3351
3352	3352	(7) a current balance sheet, a profit and loss statement, and credit 12
3353	3353	references about the financial status of the principal; 13
3354	3354
3355	3355	(8) a schedule of the status of existing and pending contracts; and 14
3356	3356
3357	3357	(9) any other relevant information the Authority requests. 15
3358	3358
3359	3359	(c)] The [Authority] DEPARTMENT may require an applicant to provide an 16
3360	3360	audited balance sheet before the [Authority] DEPARTMENT approves or denies the 17
3361	3361	application. 18
3362	3362
3363	3363	[(d)] (C) The [Authority] DEPARTMENT may not approve a guaranty or bond 19
3364	3364	under this part for a principal that has defaulted on a loan or guaranty from the [Authority] 20
3365	3365	DEPARTMENT unless: 21
3366	3366
3367	3367	(1) 2 years have passed since the time of the default; and 22
3368	3368
3369	3369	(2) the principal has cured any default in any financ ing program 23
3370	3370	administered by the Department. 24
3371	3371
3372	3372	[5–574.] 5–552. 25
3373	3373
3374	3374	(a) In its sole discretion, the [Authority] DEPARTMENT may set: 26
3375	3375
3376	3376	(1) the premiums and fees for providing bonding assistance under the 27
3377	3377	Program; and 28
3378	3378	HOUSE BILL 498 71
3379	3379
3380	3380
3381	3381	(2) the terms and conditions when the premiums and fees are payable. 1
3382	3382
3383	3383	(b) The premiums and fees may vary in amount among transactions and at 2
3384	3384	different stages of a transaction. 3
3385	3385
3386	3386	(c) A determination by the Authority on premiums and fees remains effective for 4
3387	3387	as long as the bonding assistance provided by the [Authority] DEPARTMENT is in effect. 5
3388	3388
3389	3389	[5–575.] 5–553. 6
3390	3390
3391	3391	(a) A person may not knowingly make or cause to be made a false statement or 7
3392	3392	report in an application or document submitted to the [Authority] DEPARTMENT under 8
3393	3393	this part. 9
3394	3394
3395	3395	(b) A person may not knowingly make or cause to be made a false statement or 10
3396	3396	report to influence an action of the [Authority] DEPARTMENT under this part: 11
3397	3397
3398	3398	(1) on an application for assistance; or 12
3399	3399
3400	3400	(2) affecting bonding assistance whether or not the assistance has been 13
3401	3401	extended. 14
3402	3402
3403	3403	(c) A person who violates this section is guilty of a misdemeanor and on conviction 15
3404	3404	is subject to imprisonment not exceeding [6 months] 5 YEARS or a fine not exceeding 16
3405	3405	[$1,000] $50,000 or both. 17
3406	3406
3407	3407	5–1001. 18
3408	3408
3409	3409	(a) In this subtitle the following words have the meanings indicated. 19
3410	3410
3411	3411	(b) “Fund” means the Military Personnel and Veteran–Owned Small Business 20
3412	3412	No–Interest Loan Fund established under § 5–1006 of this subtitle. 21
3413	3413
3414	3414	[(c) “Service–disabled veteran” means a veteran with a disability that is 22
3415	3415	service–connected, as defined in 38 U.S.C. § 101(16). 23
3416	3416
3417	3417	(d) (1) “Small business employer” means an employer who employed an 24
3418	3418	average of 50 or fewer employees on business days during the calendar year preceding the 25
3419	3419	determination of eligibility for a loan under this subtitle. 26
3420	3420
3421	3421	(2) For purposes of paragraph (1) of this subsection, all persons treated as 27
3422	3422	a single employer under § 414(b), (c), (m), or (o) of the Internal Revenue Code shall be 28
3423	3423	treated as a single employer under this subtitle. 29
3424	3424
3425	3425	(e) “Veteran–owned small business” means a small business that is at least 51% 30
3426	3426	owned by a veteran as defined in 38 U.S.C. § 101(2).] 31 72 HOUSE BILL 498
3427	3427
3428	3428
3429	3429
3430	3430	(C) “VETERAN–OWNED SMALL BUSINESS ENTERPRISE” HAS THE MEANING 1
3431	3431	STATED IN § 14–601 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 2
3432	3432
3433	3433	5–1002. 3
3434	3434
3435	3435	(a) Subject to the availability of funds, the Department, in consultation with the 4
3436	3436	Department of Veterans and Military Families, shall establish a program to provide 5
3437	3437	no–interest loans under this subtitle to[: 6
3438	3438
3439	3439	(1) small business employers of military reservists and National Guard 7
3440	3440	personnel who are called to active duty; 8
3441	3441
3442	3442	(2) businesses owned by military reservists and National Guard personnel 9
3443	3443	who are called to active duty; 10
3444	3444
3445	3445	(3) veteran–owned small businesses; and 11
3446	3446
3447	3447	(4) businesses employing a service–disabled veteran] VETERAN–OWNED 12
3448	3448	SMALL BUSINESS ENTER PRISES AS CERTIFIED BY THE GOVERNOR’S OFFICE OF 13
3449	3449	SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS. 14
3450	3450
3451	3451	(b) [If the availability of funds is limited, in making loans under this subtitle, the 15
3452	3452	Department, in consultation with the Department of Veterans and Military Families, shall 16
3453	3453	give priority to the businesses described in subsection (a)(2) and (3) of this section. 17
3454	3454
3455	3455	(c)] In making loans under this subtitle, the Department, in consultation with the 18
3456	3456	Department of Veterans and Military Families, shall take into consideration how to 19
3457	3457	maximize the number of [veterans, military reservists, and National Guard personnel] 20
3458	3458	VETERAN–OWNED SMALL BUSINESS ENTERPRISES who would benefit from loans made 21
3459	3459	under this subtitle. 22
3460	3460
3461	3461	[5–1003. 23
3462	3462
3463	3463	Loans shall be made under this subtitle for the purposes of: 24
3464	3464
3465	3465	(1) providing financial support to: 25
3466	3466
3467	3467	(i) a business owned by a military reservist or National Guard 26
3468	3468	member who is called to active duty; or 27
3469	3469
3470	3470	(ii) a small business employer of a military reservist or National 28
3471	3471	Guard member who is called to active duty; 29
3472	3472
3473	3473	(2) making the home, motor vehicle, or place of employment of a veteran 30
3474	3474	accessible to individuals with disabilities, including purchasing equipment necessary to 31 HOUSE BILL 498 73
3475	3475
3476	3476
3477	3477	enable a business to employ a service–disabled veteran or to enable a service–disabled 1
3478	3478	veteran to operate a business; and 2
3479	3479
3480	3480	(3) defraying other necessary expenses, as determined by the Department 3
3481	3481	of Veterans and Military Families, incurred by: 4
3482	3482
3483	3483	(i) a business employing a service–disabled veteran; or 5
3484	3484
3485	3485	(ii) a veteran–owned small business.] 6
3486	3486
3487	3487	[5–1004. 7
3488	3488
3489	3489	(a) A loan made under this subtitle for the purpose of providing financial support 8
3490	3490	to a business owned by an individual who is called to active duty or to a small business 9
3491	3491	employer of an individual who is called to active duty: 10
3492	3492
3493	3493	(1) may be made at any time from the individual’s receipt of orders to 11
3494	3494	report to 6 months after the end of the individual’s active duty; and 12
3495	3495
3496	3496	(2) shall be subject to criteria for eligibility and priority established by the 13
3497	3497	Department of Veterans and Military Families, including the extent to which the individual 14
3498	3498	who is called to active duty is an essential employee of the business. 15
3499	3499
3500	3500	(b) A loan made under this subtitle for the purpose of making accessible to 16
3501	3501	individuals with disabilities the home, motor vehicle, or place of employment of a 17
3502	3502	service–disabled veteran may be made at any time.] 18
3503	3503
3504	3504	[5–1005. 19
3505	3505
3506	3506	(a) The Department shall administer the loan program authorized under this 20
3507	3507	subtitle. 21
3508	3508
3509	3509	(b) The Department of Veterans and Military Families shall establish eligibility 22
3510	3510	criteria for loans under this subtitle.] 23
3511	3511
3512	3512	[5–1006.] 5–1003. 24
3513	3513
3514	3514	(a) There is a Military Personnel and Veteran –Owned Small Business 25
3515	3515	No–Interest Loan Fund. 26
3516	3516
3517	3517	(b) The purpose of the Fund is to provide no–interest loans consistent with this 27
3518	3518	subtitle. 28
3519	3519
3520	3520	(c) The Secretary shall administer the Fund. 29
3521	3521
3522	3522	(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 30 74 HOUSE BILL 498
3523	3523
3524	3524
3525	3525	under § 7–302 of the State Finance and Procurement Article. 1
3526	3526
3527	3527	(2) The State Treasurer shall hold the Fund separately, and the 2
3528	3528	Comptroller shall account for the Fund. 3
3529	3529
3530	3530	(3) Any investment earnings of the Fund shall be credited to the Fund. 4
3531	3531
3532	3532	(e) The Fund consists of: 5
3533	3533
3534	3534	(1) money the State appropriates to the Fund; 6
3535	3535
3536	3536	(2) money made available to the Fund through federal programs or private 7
3537	3537	contributions; 8
3538	3538
3539	3539	(3) repayments from loans provided by the Department under this subtitle; 9
3540	3540
3541	3541	(4) proceeds from the sale, disposition, lease, or rental of collateral related 10
3542	3542	to loans provided by the Department under this subtitle; and 11
3543	3543
3544	3544	(5) any other money made available to the Fund. 12
3545	3545
3546	3546	(f) The Department may use money in the Fund to provide loans to eligible 13
3547	3547	applicants under [§§ 5–1002 through 5–1004] § 5–1002 of this subtitle. 14
3548	3548
3549	3549	[5–1007. 15
3550	3550
3551	3551	(a) The Department shall adopt regulations to carry out this subtitle. 16
3552	3552
3553	3553	(b) The Department of Veterans and Military Families may adopt regulations 17
3554	3554	concerning eligibility criteria for loans under this subtitle.] 18
3555	3555
3556	3556	5–1204. 19
3557	3557
3558	3558	(a) (1) (ii) 4. If the money in the Account exceeds $1,000,000, any 20
3559	3559	money in excess of that amount shall be transferred to the [Small, Minority, and 21
3560	3560	Women–Owned Businesses] REINVEST FOR SUCCESS Account established under § 22
3561	3561	5–1501 of this title. 23
3562	3562
3563	3563	Subtitle 15. [Small, Minority, and Women–Owned Businesses] REINVEST FOR 24
3564	3564	SUCCESS Account. 25
3565	3565
3566	3566	5–1501. 26
3567	3567
3568	3568	(a) There is a [Small, Minority, and Women–Owned Businesses] REINVEST FOR 27
3569	3569	SUCCESS Account under the authority of the Department. 28
3570	3570	HOUSE BILL 498 75
3571	3571
3572	3572
3573	3573	5–2401. 1
3574	3574
3575	3575	(a) In this subtitle the following words have the meanings indicated. 2
3576	3576
3577	3577	(b) “Fund” means the Industry 4.0 Technology Grant Fund. 3
3578	3578
3579	3579	(c) (1) “Industry 4.0 technology” means smart hardware and software 4
3580	3580	manufacturing technologies. 5
3581	3581
3582	3582	(2) “Industry 4.0 technology” includes: 6
3583	3583
3584	3584	(i) advanced sensor integration; 7
3585	3585
3586	3586	(ii) embedded software system applications; 8
3587	3587
3588	3588	(iii) robotics and autonomous equipment that collect data; 9
3589	3589
3590	3590	(iv) enterprise resource planning (ERP) and data analytics software; 10
3591	3591
3592	3592	(v) cloud computing and cybersecurity solutions; 11
3593	3593
3594	3594	(vi) artificial intelligence (AI) for continuous improvement of 12
3595	3595	efficiency and productivity; and 13
3596	3596
3597	3597	(vii) infrastructure required to implement a qualifying technology. 14
3598	3598
3599	3599	(d) “Program” means the Industry 4.0 Technology Grant Program. 15
3600	3600
3601	3601	(e) “Program administrator” means the entity that has authority to administer 16
3602	3602	the Program. 17
3603	3603
3604	3604	(f) “SME manufacturer” means a small or medium –sized enterprise 18
3605	3605	manufacturer. 19
3606	3606
3607	3607	5–2402. 20
3608	3608
3609	3609	(a) There is an Industry 4.0 Technology Grant Program in the Department. 21
3610	3610
3611	3611	(b) The Department may enter into a memorandum of understanding with a 22
3612	3612	State–chartered corporation under Title 10 of this article to authorize the State–chartered 23
3613	3613	corporation to administer the Program in accordance with this subtitle. 24
3614	3614
3615	3615	(c) The purpose of the Program is to assist SME manufacturers in the purchase, 25
3616	3616	implementation, and related employee training of Industry 4.0 technology and related 26
3617	3617	infrastructure in order to increase productivity, efficiency, and competitiveness in the State 27
3618	3618	and national manufacturing environment. 28
3619	3619	76 HOUSE BILL 498
3620	3620
3621	3621
3622	3622	(d) To qualify for a grant under the Program, an SME manufacturer shall submit 1
3623	3623	to the Program administrator an application that demonstrates that: 2
3624	3624
3625	3625	(1) the company is a qualifying SME manufacturer; 3
3626	3626
3627	3627	(2) the company has business operations in Maryland; and 4
3628	3628
3629	3629	(3) the company has been in existence for over 1 year. 5
3630	3630
3631	3631	(e) (1) [In] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IN 6
3632	3632	awarding grants under the Program, the Program administrator shall award grants on a 7
3633	3633	competitive basis based on: 8
3634	3634
3635	3635	(i) the proposed project’s alignment with adoption of Industry 4.0 9
3636	3636	technologies; 10
3637	3637
3638	3638	(ii) the applicant’s demonstrated overall commitment to, or strategy 11
3639	3639	for, Industry 4.0 technology adoption; 12
3640	3640
3641	3641	(iii) the demonstrated positive impact of the Industry 4.0 technology 13
3642	3642	on the applicant’s business operations and competitiveness; and 14
3643	3643
3644	3644	(iv) any other information requested by the Program administrator. 15
3645	3645
3646	3646	(2) THE DEPARTMENT SHALL PRIO RITIZE AWARDING GRAN TS TO 16
3647	3647	SME MANUFACTURERS ENGAGE D IN THE SECTO RS AND ACTIVITY INCL UDED ON 17
3648	3648	THE LIST ESTABLISHED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF 18
3649	3649	THIS ARTICLE. 19
3650	3650
3651	3651	[(2)] (3) Subject to paragraph [(3)] (4) of this subsection, the Department 20
3652	3652	shall award to an eligible SME manufacturer a grant of at least $25,000, but not exceeding 21
3653	3653	$500,000. 22
3654	3654
3655	3655	[(3)] (4) (i) An SME manufacturer that receives a grant under this 23
3656	3656	subsection shall provide matching funds in the amounts specified under this paragraph. 24
3657	3657
3658	3658	(ii) The Department shall establish a sliding scale formula for the 25
3659	3659	matching funds required by an SME manufacturer to be provided a grant under this 26
3660	3660	section, with SME manufacturers with fewer employees requiring a lesser percentage and 27
3661	3661	SME manufacturers with more employees requiring a higher percentage. 28
3662	3662
3663	3663	[(4)] (5) (i) The Department shall reserve at least 20% of the funds 29
3664	3664	available during each fiscal year for awarding grants under this subsection to SME 30
3665	3665	manufacturers that employ 50 or fewer employees. 31
3666	3666
3667	3667	(ii) If the total amount of grants applied for by SME manufacturers 32 HOUSE BILL 498 77
3668	3668
3669	3669
3670	3670	that employ 50 or fewer employees is less than the amount of funds reserved under 1
3671	3671	subparagraph (i) of this paragraph during a fiscal year, the Department may utilize the 2
3672	3672	balance of the reserved funds for awarding grants under this subsection to SME 3
3673	3673	manufacturers that employ more than 50 employees. 4
3674	3674
3675	3675	(f) (1) A grant awarded under the Program may be used for projects that 5
3676	3676	directly affect manufacturing processes and focus on investments in Industry 4.0 6
3677	3677	technology commercial–ready equipment through established vendors or related 7
3678	3678	infrastructure. 8
3679	3679
3680	3680	(2) Within 1 year after receiving a grant under the Program, an SME 9
3681	3681	manufacturer shall submit to the Department a letter that: 10
3682	3682
3683	3683	(i) describes how the grant funding was used; and 11
3684	3684
3685	3685	(ii) includes any invoices related to the implementation of the 12
3686	3686	Industry 4.0 technology or related infrastructure. 13
3687	3687
3688	3688	(3) The Department may require a grant recipient that fails to fulfill the 14
3689	3689	requirements of the grant to return all or part of the grant to the Program. 15
3690	3690
3691	3691	6–601. 16
3692	3692
3693	3693	(a) In this subtitle the following words have the meanings indicated. 17
3694	3694
3695	3695	(b) “Authority” means the Maryland E–Nnovation Initiative Fund Authority 18
3696	3696	established under § 6–605 of this subtitle. 19
3697	3697
3698	3698	(C) “ELIGIBLE FIELD OF STU DY” MEANS A FIELD OF STU DY FOCUSED ON 20
3699	3699	THE PRIORITY SECTORS AND ACTIVITY INCLUDE D ON THE LIST ESTABL ISHED IN 21
3700	3700	ACCORDANCE WITH § 2.5–106 OF THIS ARTICLE. 22
3701	3701
3702	3702	[(c)] (D) “Endowment proceeds” means those investment earnings accruing to a 23
3703	3703	research endowment of a nonprofit institution of higher education and available for 24
3704	3704	expenditure by the institution in accordance with § 6–612 of this subtitle. 25
3705	3705
3706	3706	[(d)] (E) “Fund” means the Maryland E–Nnovation Initiative Fund created 26
3707	3707	under § 6–604 of this subtitle. 27
3708	3708
3709	3709	[(e)] (F) “Governing board” has the meaning stated in § 10–101 of the Education 28
3710	3710	Article. 29
3711	3711
3712	3712	[(f)] (G) “Governing body” means: 30
3713	3713
3714	3714	(1) a governing board; 31
3715	3715	78 HOUSE BILL 498
3716	3716
3717	3717
3718	3718	(2) the governing entity of a private nonprofit institution of higher 1
3719	3719	education; or 2
3720	3720
3721	3721	(3) the governing entity of a regional higher education center. 3
3722	3722
3723	3723	[(g)] (H) (1) “Nonprofit institution of higher education” means an institution 4
3724	3724	of postsecondary education located in the State, that receives State funds in the annual 5
3725	3725	operating budget and that generally limits enrollment to graduates of secondary schools 6
3726	3726	and awards degrees at either the associate, baccalaureate, or graduate level. 7
3727	3727
3728	3728	(2) “Nonprofit institution of higher education” includes public and private 8
3729	3729	nonprofit institutions of higher education located in the State. 9
3730	3730
3731	3731	[(h)] (I) “Private nonprofit institution of higher education” has the meaning 10
3732	3732	stated in § 10–101 of the Education Article. 11
3733	3733
3734	3734	[(i)] (J) “Program” means the Maryland E–Nnovation Initiative Program under 12
3735	3735	this subtitle. 13
3736	3736
3737	3737	[(j)] (K) “Qualified donation” means any private donation, gift, irrevocable 14
3738	3738	pledge, or bequest to a research endowment in accordance with § 6–613 of this subtitle. 15
3739	3739
3740	3740	[(k)] (L) “Regional higher education center” has the meaning stated in § 10–101 16
3741	3741	of the Education Article. 17
3742	3742
3743	3743	[(l)] (M) “Research endowment” means an acco unt established at or 18
3744	3744	administered by a nonprofit institution of higher education in accordance with § 6–612 of 19
3745	3745	this subtitle. 20
3746	3746
3747	3747	6–604. 21
3748	3748
3749	3749	(a) There is a Maryland E–Nnovation Initiative Fund in the Department. 22
3750	3750
3751	3751	(b) The Secretary shall manage and supervise the Fund. 23
3752	3752
3753	3753	(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 24
3754	3754	the State Finance and Procurement Article. 25
3755	3755
3756	3756	(2) The State Treasurer shall hold the Fund separately, and the 26
3757	3757	Comptroller shall account for the Fund. 27
3758	3758
3759	3759	(d) The Fund consists of: 28
3760	3760
3761	3761	(1) revenue distributed to the Fund under § 2–202(a)(1) of the Tax – 29
3762	3762	General Article; 30
3763	3763	HOUSE BILL 498 79
3764	3764
3765	3765
3766	3766	(2) money appropriated in the State budget to the Fund; and 1
3767	3767
3768	3768	(3) any other money from any other source accepted for the benefit of the 2
3769	3769	Fund. 3
3770	3770
3771	3771	(e) For each of fiscal years 2016 through 2026, the Governor shall include in the 4
3772	3772	budget bill an appropriation to the Fund in an amount that when combined with the 5
3773	3773	amount estimated to be distributed to the Fund under subsection (d)(1) of this section 6
3774	3774	equals at least $8,500,000. 7
3775	3775
3776	3776	(f) The Department may use the Fund to: 8
3777	3777
3778	3778	(1) finance research endowments at nonprofit institutions of higher 9
3779	3779	education in [scientific and technical fields] AN ELIGIBLE FIELD of study; and 10
3780	3780
3781	3781	(2) pay the related administrative, legal, and actuarial expenses of the 11
3782	3782	Department. 12
3783	3783
3784	3784	(g) (1) The State Treasurer shall invest the money of the Fund in the same 13
3785	3785	manner as other State money may be invested. 14
3786	3786
3787	3787	(2) Any investment earnings of the Fund shall be credited to the Fund. 15
3788	3788
3789	3789	(h) Expenditures from the Fund may be made only in accordance with the State 16
3790	3790	budget. 17
3791	3791
3792	3792	6–614. 18
3793	3793
3794	3794	(a) Endowment proceeds shall be expended by a nonprofit institution of higher 19
3795	3795	education to further basic and applied research in [scientific and technical fields] AN 20
3796	3796	ELIGIBLE FIELD of study as designated by the Authority that offer promising and 21
3797	3797	significant economic impacts and the opportunity to develop clusters of technological 22
3798	3798	innovation in the State[, including: 23
3799	3799
3800	3800	(1) physical sciences; 24
3801	3801
3802	3802	(2) life and neuro sciences; 25
3803	3803
3804	3804	(3) engineering; 26
3805	3805
3806	3806	(4) mathematical and computational sciences; 27
3807	3807
3808	3808	(5) regulatory science; 28
3809	3809
3810	3810	(6) autonomous systems; 29
3811	3811
3812	3812	(7) aeronautical and space science; 30 80 HOUSE BILL 498
3813	3813
3814	3814
3815	3815
3816	3816	(8) environmental sciences; 1
3817	3817
3818	3818	(9) behavioral and language science; 2
3819	3819
3820	3820	(10) health sciences; 3
3821	3821
3822	3822	(11) agriculture; or 4
3823	3823
3824	3824	(12) cybersecurity]. 5
3825	3825
3826	3826	(b) Endowment proceeds may be expended by a nonprofit institution of higher 6
3827	3827	education for: 7
3828	3828
3829	3829	(1) the payment of the base salaries of newly endowed department chairs, 8
3830	3830	new professorship positions, new research scientists, or new research staff positions, 9
3831	3831	including research technicians and support personnel, and to fund affiliated graduate or 10
3832	3832	undergraduate student research fellowships, if the positions or fellowships are engaged in 11
3833	3833	[the areas of research identified in subsection (a) of this section] AN ELIGIBLE FIELD OF 12
3834	3834	STUDY; or 13
3835	3835
3836	3836	(2) the purchase of basic infrastructure, including laboratory and scientific 14
3837	3837	equipment or other essential equipment and materials, related to an [area of research 15
3838	3838	identified in subsection (a) of this section] ELIGIBLE FIELD OF ST UDY. 16
3839	3839
3840	3840	(c) An individual in a position that is funded by endowment proceeds under 17
3841	3841	subsection (b)(1) of this section shall: 18
3842	3842
3843	3843	(1) work at least 20% of the year in support of a federal laboratory or 19
3844	3844	associated federal laboratory research support organization; 20
3845	3845
3846	3846	(2) hold a joint appointment or secondary position at another nonprofit 21
3847	3847	institution of higher education in the State; or 22
3848	3848
3849	3849	(3) work at least 20% of the year in support of entrepreneurial activities 23
3850	3850	with a company engaged in [one or more of the research areas identified in subsection (a) 24
3851	3851	of this section] AN ELIGIBLE FIELD OF STUDY. 25
3852	3852
3853	3853	(d) The Authority shall issue eligibility criteria regarding the expenditure of 26
3854	3854	endowment proceeds to pay the base salaries of personnel, fund student fellowships, and 27
3855	3855	purchase basic infrastructure. 28
3856	3856
3857	3857	PART I. MARYLAND ECONOMIC DEVELOPMENT CORPORATION . 29
3858	3858
3859	3859	10–101. 30
3860	3860	HOUSE BILL 498 81
3861	3861
3862	3862
3863	3863	(a) In this subtitle the following words have the meanings indicated. 1
3864	3864
3865	3865	(b) “Board” means the Board of Directors of the Corporation. 2
3866	3866
3867	3867	(d) “Corporation” means the Maryland Economic Development Corporation. 3
3868	3868
3869	3869	10–115. 4
3870	3870
3871	3871	(A) The Corporation may: 5
3872	3872
3873	3873	(1) adopt bylaws for the conduct of its business; 6
3874	3874
3875	3875	(2) adopt a seal; 7
3876	3876
3877	3877	(3) maintain offices at a place it designates in the State; 8
3878	3878
3879	3879	(4) accept loans, grants, or assistance of any kind from the federal 9
3880	3880	government, a governmental unit, a college or university, or a private source; 10
3881	3881
3882	3882	(5) enter into contracts and other legal instruments; 11
3883	3883
3884	3884	(6) sue and be sued in its own name; 12
3885	3885
3886	3886	(7) acquire, purchase, hold, lease as lessee, and use any franchise, patent, 13
3887	3887	or license and real, personal, mixed, tangible, or intangible property, or any interest in 14
3888	3888	property, necessary or convenient to carry out its purposes; 15
3889	3889
3890	3890	(8) sell, lease as lessor, transfer, and dispose of its property or interest in 16
3891	3891	property; 17
3892	3892
3893	3893	(9) fix and collect rates, rentals, fees, royalties, and charges for services, 18
3894	3894	resources, and facilities it provides or makes available; 19
3895	3895
3896	3896	(10) with the owner’s permission, enter lands, waters, or premises to make 20
3897	3897	a survey, sounding, boring, or examination to accomplish a purpose authorized by this 21
3898	3898	subtitle; 22
3899	3899
3900	3900	(11) further define or limit the term “revenues” defined in § 10–101 of this 23
3901	3901	subtitle as the term applies to a particular project, financing, or other matter; 24
3902	3902
3903	3903	(12) create, own, control, or be a member of a corporation, limited liability 25
3904	3904	company, partnership, or other person, whether for–profit or nonprofit; 26
3905	3905
3906	3906	(13) exercise a power usually possessed by a private corporation in 27
3907	3907	performing similar functions unless to do so would conflict with State law; and 28
3908	3908
3909	3909	(14) do all things necessary or convenient to carry out the powers expressly 29 82 HOUSE BILL 498
3910	3910
3911	3911
3912	3912	granted by this subtitle. 1
3913	3913
3914	3914	(B) THE CORPORATION MAY UTILI ZE UP TO 5% OF THE ALLOCATED 2
3915	3915	APPROPRIATION FOR AD MINISTRATIVE COSTS F OR ANY PROJECT OR PR OGRAM 3
3916	3916	DIRECTED BY THE CORPORATION INCLUDED IN THE STATE’S ANNUAL OPERATING 4
3917	3917	OR CAPITAL BUDGETS . 5
3918	3918
3919	3919	10–133. 6
3920	3920
3921	3921	(a) On or before October 1 of each year, the Corporation shall submit a report to 7
3922	3922	the Governor[, the Maryland Economic Development Commission,] and, in accordance with 8
3923	3923	§ 2–1257 of the State Government Article, the General Assembly. 9
3924	3924
3925	3925	(b) The report shall include a complete operating and financial statement and 10
3926	3926	summarize the activities of the Corporation during the preceding fiscal year. 11
3927	3927
3928	3928	10–135. RESERVED. 12
3929	3929
3930	3930	10–136. RESERVED. 13
3931	3931
3932	3932	Part II. Regional Institution Strategic Enterprise Zone Program. 14
3933	3933
3934	3934	10–137. 15
3935	3935
3936	3936	(a) In this [subtitle] PART the following words have the meanings indicated. 16
3937	3937
3938	3938	(b) “Area” means a geographic area in one or more political subdivisions in the 17
3939	3939	State described by a closed perimeter boundary. 18
3940	3940
3941	3941	(c) “Fund” means the Regional Institution Strategic Enterprise Zone Fund 19
3942	3942	created under [§ 5–1408] § 10–144 of this subtitle. 20
3943	3943
3944	3944	(d) “Nonprofit organization” means an organization that is exempt or eligible for 21
3945	3945	exemption from taxation under § 501(c)(3) of the Internal Revenue Code. 22
3946	3946
3947	3947	(e) “Qualified institution” means an entity that is designated as a qualified 23
3948	3948	institution under [§ 5–1403] § 10–139 of this subtitle and may include: 24
3949	3949
3950	3950	(1) a regional higher education center as defined under § 10–101 of the 25
3951	3951	Education Article; 26
3952	3952
3953	3953	(2) an institution of higher education as defined under § 10–101 of the 27
3954	3954	Education Article; or 28
3955	3955
3956	3956	(3) a nonprofit organization that is affiliated with a federal agency. 29
3957	3957	HOUSE BILL 498 83
3958	3958
3959	3959
3960	3960	(f) “RISE zone” means a geographic area in immediate proximity to a qualified 1
3961	3961	institution that is targeted for increased economic and community development that meets 2
3962	3962	the requirements of [§ 5–1404] § 10–140 of this subtitle and is designated as a Regional 3
3963	3963	Institution Strategic Enterprise zone by the [Secretary] CORPORATION under [§ 5–1404] 4
3964	3964	§ 10–140 of this subtitle. 5
3965	3965
3966	3966	10–138. 6
3967	3967
3968	3968	The purposes of the Regional Institution Strategic Enterprise Zone Program are to 7
3969	3969	access institutional assets that have a strong and demonstrated history of commitment to 8
3970	3970	economic development and revitalization in the communities in which they are located and 9
3971	3971	incentivize the location of innovative start–up businesses based on technology developed, 10
3972	3972	licensed, or poised for commercialization at or in collaboration with qualified Maryland 11
3973	3973	institutions. 12
3974	3974
3975	3975	10–139. 13
3976	3976
3977	3977	(a) An institution may apply to the [Secretary] CORPORATION to be designated 14
3978	3978	as a qualified institution. 15
3979	3979
3980	3980	(b) To be eligible for designation as a qualified institution, the applicant shall: 16
3981	3981
3982	3982	(1) evidence an intention: 17
3983	3983
3984	3984	(i) to make a significant financial investment or commitment in an 18
3985	3985	area of the State that the applicant intends to become a RISE zone; 19
3986	3986
3987	3987	(ii) to use the resources and expertise of the applicant to spur 20
3988	3988	economic development and community revitalization in an area of the State that the 21
3989	3989	applicant intends to become a RISE zone; and 22
3990	3990
3991	3991	(iii) to create a significant number of new jobs within an area of the 23
3992	3992	State that the applicant intends to become a RISE zone; 24
3993	3993
3994	3994	(2) have a demonstrated history of community involvement and economic 25
3995	3995	development within the communities that the applicant serves; and 26
3996	3996
3997	3997	(3) meet the minimum financial qualifications established by the 27
3998	3998	[Secretary] CORPORATION . 28
3999	3999
4000	4000	(c) If the applicant is a nonprofit organization that is not an institution of higher 29
4001	4001	education, the application shall demonstrate an affiliation with a federal agency. 30
4002	4002
4003	4003	(d) (1) In addition to the requirements under subsection (b) of this section, the 31
4004	4004	[Secretary] CORPORATION may establish by regulation any other requirements necessary 32
4005	4005	and appropriate in order for an applicant to be designated as a qualified institution. 33 84 HOUSE BILL 498
4006	4006
4007	4007
4008	4008
4009	4009	(2) The [Secretary] CORPORATION shall adopt regulations that establish 1
4010	4010	factors for evaluating applications under subsection (b) of this section. 2
4011	4011
4012	4012	(e) In the form and content acceptable to the [Secretary] CORPORATION , an 3
4013	4013	applicant shall submit to the [Secretary] CORPORATION an application that contains the 4
4014	4014	information that the [Secretary] CORPORATION considers necessary to evaluate the 5
4015	4015	request for designation as a qualified institution. 6
4016	4016
4017	4017	(f) (1) Within 90 days after submission of an application under this section, 7
4018	4018	the [Secretary] CORPORATION shall approve or reject the application of an institution to 8
4019	4019	be designated as a qualified institution. 9
4020	4020
4021	4021	(2) At least 30 days before approval or rejection of an application under this 10
4022	4022	section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 11
4023	4023
4024	4024	(3) The Legislative Policy Committee may provide advice to the [Secretary] 12
4025	4025	CORPORATION regarding the approval or rejection of an institution as a qualified 13
4026	4026	institution. 14
4027	4027
4028	4028	10–140. 15
4029	4029
4030	4030	(a) On or after July 1, [2015] 2025, a qualified institution shall apply jointly with 16
4031	4031	a county, a municipal corporation, or the economic development agency of a county or 17
4032	4032	municipal corporation to the [Secretary] CORPORATION to designate an area as a 18
4033	4033	Regional Institution Strategic Enterprise zone. 19
4034	4034
4035	4035	(b) The application shall: 20
4036	4036
4037	4037	(1) be in the form and contain the information that the [Secretary] 21
4038	4038	CORPORATION requires by regulation; 22
4039	4039
4040	4040	(2) state the boundaries of the area of the proposed RISE zone, not 23
4041	4041	exceeding 500 acres; 24
4042	4042
4043	4043	(3) describe the nexus of the RISE zone with the qualified institution; and 25
4044	4044
4045	4045	(4) contain a plan that identifies the target strategy and anticipated 26
4046	4046	economic impacts of the RISE zone. 27
4047	4047
4048	4048	(c) The [Secretary] CORPORATION may establish, by regulation, any other 28
4049	4049	requirements necessary and appropriate for an area to be designated as a RISE zone. 29
4050	4050
4051	4051	(d) (1) Unless a county in which a municipal corporation is located agrees to 30
4052	4052	designation of a RISE zone in the municipal corporation, qualified property in the 31
4053	4053	municipal corporation may not receive a tax credit against county property tax. 32 HOUSE BILL 498 85
4054	4054
4055	4055
4056	4056
4057	4057	(2) Unless a municipal corporation located within a county agrees to 1
4058	4058	designation of a RISE zone within its boundaries, qualified property in the county may not 2
4059	4059	receive a tax credit against the municipal property tax. 3
4060	4060
4061	4061	(e) (1) Within 120 days after submission of an application under this section, 4
4062	4062	the [Secretary] CORPORATION shall: 5
4063	4063
4064	4064	(i) approve or reject an application for designation of a RISE zone, 6
4065	4065	including approval or modification of the proposed boundaries of the RISE zone; and 7
4066	4066
4067	4067	(ii) define the boundaries of the approved RISE zone. 8
4068	4068
4069	4069	(2) At least 45 days before approval or rejection of an application under this 9
4070	4070	section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 10
4071	4071
4072	4072	(3) The Legislative Policy Committee may provide advice to the [Secretary] 11
4073	4073	CORPORATION regarding: 12
4074	4074
4075	4075	(i) the approval or rejection of the RISE zone; or 13
4076	4076
4077	4077	(ii) the boundaries of the RISE zone proposed by the [Secretary] 14
4078	4078	CORPORATION . 15
4079	4079
4080	4080	(f) (1) (i) Subject to subparagraph (ii) of this paragraph, the designation of 16
4081	4081	an area as a RISE zone is effective for 10 years. 17
4082	4082
4083	4083	(ii) Upon a joint application of a qualified institution, a county and, 18
4084	4084	if applicable, a municipal corporation, or the economic development agency of a county or 19
4085	4085	municipal corporation, the [Secretary] CORPORATION may renew a RISE zone for an 20
4086	4086	additional [5] 10 years. 21
4087	4087
4088	4088	(2) The [Secretary] CORPORATION may not: 22
4089	4089
4090	4090	(i) 1. except as provided in item 2 of this item, approve more 23
4091	4091	than three RISE zones in a single county or municipal corporation; or 24
4092	4092
4093	4093	2. approve more than four RISE zones in Baltimore City; or 25
4094	4094
4095	4095	(ii) approve a RISE zone the geographic area of which exceeds 500 26
4096	4096	acres. 27
4097	4097
4098	4098	(g) (1) A RISE zone may not be required to be in the immediate geographic 28
4099	4099	proximity of a qualified institution if an appropriate nexus for the increased economic and 29
4100	4100	community development is established with the qualified organization. 30
4101	4101	86 HOUSE BILL 498
4102	4102
4103	4103
4104	4104	(2) If the proposed RISE zone is in a rural part of the State, a qualified 1
4105	4105	institution may not be required to be in the immediate area of the RISE zone. 2
4106	4106
4107	4107	(h) The [Secretary] CORPORATION may not designate a RISE zone in: 3
4108	4108
4109	4109	(1) a development district established under Title 12, Subtitle 2 of this 4
4110	4110	article; or 5
4111	4111
4112	4112	(2) a special taxing district established under Title 21 of the Local 6
4113	4113	Government Article or Section 62A of the Baltimore City Charter. 7
4114	4114
4115	4115	(i) The designation of an area as a RISE zone may not be construed 8
4116	4116	to limit or supersede a provision of a comprehensive plan, zoning ordinance, or other land 9
4117	4117	use policy adopted by a county, municipal corporation, or bicounty agency with land use 10
4118	4118	authority over the area designated as a RISE zone. 11
4119	4119
4120	4120	10–141. 12
4121	4121
4122	4122	(a) The [Secretary] CORPORATION shall assign to a RISE zone a business and 13
4123	4123	community development concierge who is an employee of the [Department] 14
4124	4124	CORPORATION . 15
4125	4125
4126	4126	(b) A business and community development concierge shall assist entities 16
4127	4127	locating in the RISE zone with: 17
4128	4128
4129	4129	(1) State, county, or municipal corporation permit and license applications; 18
4130	4130
4131	4131	(2) accessing existing programs at THE CORPORATION , the Department, 19
4132	4132	the Department of Housing and Community Development, the Maryland Department of 20
4133	4133	Labor, the Maryland Technology Development Corporation, or the Department of 21
4134	4134	Transportation; and 22
4135	4135
4136	4136	(3) any other activities the [Secretary] CORPORATION authorizes that 23
4137	4137	relate to the development of the RISE zone. 24
4138	4138
4139	4139	10–142. 25
4140	4140
4141	4141	(a) (1) To the extent provided for in this section, a business entity that locates 26
4142	4142	in a RISE zone is entitled to: 27
4143	4143
4144	4144	(i) for a business entity that locates in the RISE zone before January 28
4145	4145	1, 2023, the property tax credit under § 9–103.1 of the Tax – Property Article; 29
4146	4146
4147	4147	(ii) for a taxable year beginning before January 1, 2023, the income 30
4148	4148	tax credit under § 10–702 of the Tax – General Article; and 31
4149	4149	HOUSE BILL 498 87
4150	4150
4151	4151
4152	4152	(iii) priority consideration for financial assistance from programs in 1
4153	4153	Subtitle 1 of this title. 2
4154	4154
4155	4155	(2) For purposes of the income tax credit authorized under paragraph (1)(ii) 3
4156	4156	of this subsection, the business entity is treated as being located in an enterprise zone. 4
4157	4157
4158	4158	(b) Subject to the limitations under subsection (a) of this section, a business entity 5
4159	4159	that moves into or locates in a RISE zone on or after the date that the zone is designated 6
4160	4160	under this [subtitle] PART may qualify for the incentives under this section. 7
4161	4161
4162	4162	(c) A business entity may not qualify for the incentives under subsection (a) of 8
4163	4163	this section unless the [Department] CORPORATION , in consultation with the county or 9
4164	4164	municipal corporation in which a RISE zone is located, certifies the business entity and its 10
4165	4165	location as consistent with the target strategy of the RISE zone. 11
4166	4166
4167	4167	(d) (1) Unless a business entity makes a significant capital investment or 12
4168	4168	expansion of its labor force after a RISE zone is designated, the incentives under this 13
4169	4169	section are not available to a business entity that was in a RISE zone before the date that 14
4170	4170	the zone is designated. 15
4171	4171
4172	4172	(2) The [Department] CORPORATION shall adopt regulations 16
4173	4173	establishing factors to determine if a business entity makes a significant capital investment 17
4174	4174	or expansion of its labor force under paragraph (1) of this subsection. 18
4175	4175
4176	4176	10–143. 19
4177	4177
4178	4178	(a) (1) (i) A qualified institution, THE CORPORATION , a county and, if 20
4179	4179	applicable, a municipal corporation, or the economic development agency of a county or 21
4180	4180	municipal corporation may establish a program to provide rental assistance to a business 22
4181	4181	entity that: 23
4182	4182
4183	4183	1. moves into or locates in a RISE zone on or after the date 24
4184	4184	that the zone is designated under this [subtitle] PART; AND 25
4185	4185
4186	4186	2. [has nexus with a qualified institution located in the RISE 26
4187	4187	zone; and 27
4188	4188
4189	4189	3. has been in active business not longer than 7 years] IS 28
4190	4190	ENCOMPASSED BY THE I NDUSTRY SECTORS AND ACTIVITIES INCLUDED ON THE LIST 29
4191	4191	DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF THIS 30
4192	4192	ARTICLE. 31
4193	4193
4194	4194	(ii) A business entity may not receive rental assistance under a 32
4195	4195	rental assistance program established in accordance with subparagraph (i) of this 33
4196	4196	paragraph for more than [3] 5 years. 34
4197	4197	88 HOUSE BILL 498
4198	4198
4199	4199
4200	4200	(2) (i) A qualified institution, a county and, if applicable, a municipal 1
4201	4201	corporation, or the economic development agency of a county or municipal corporation that 2
4202	4202	establishes a rental assistance program in accordance with paragraph (1) of this subsection 3
4203	4203	may submit a request to receive a distribution [of matching funds] from the Fund. 4
4204	4204
4205	4205	(ii) The application shall include: 5
4206	4206
4207	4207	1. a description of the rental assistance program; 6
4208	4208
4209	4209	2. the amount of funding that the applicant has secured to 7
4210	4210	provide rental assistance under the rental assistance program; 8
4211	4211
4212	4212	3. the amount requested for distribution from the Fund in 9
4213	4213	accordance with this section; and 10
4214	4214
4215	4215	4. any other information requested by the [Department] 11
4216	4216	CORPORATION . 12
4217	4217
4218	4218	(iii) The applicant shall submit the application on or before the date 13
4219	4219	that the [Department] CORPORATION specifies. 14
4220	4220
4221	4221	(b) (1) The [Department] CORPORATION shall review each request for 15
4222	4222	distribution [of matching funds] from the Fund for compliance with the provisions of this 16
4223	4223	section and [Department] CORPORATION regulations. 17
4224	4224
4225	4225	(2) [Subject to the availability of funds in the Fund and paragraph (3) of 18
4226	4226	this subsection, if the Department approves a request for distribution of matching funds 19
4227	4227	from the Fund, the Department shall distribute to a fund dedicated to the applicant’s rental 20
4228	4228	assistance program an amount equal to three times the amount of funding specified under 21
4229	4229	subsection (a)(2)(ii)2 of this section. 22
4230	4230
4231	4231	(3) Except as provided in subsection (c) of this section, the Department] 23
4232	4232	THE CORPORATION shall make available not more than 25% of cumulative program funds 24
4233	4233	from the Fund for rental assistance programs in a single RISE zone. 25
4234	4234
4235	4235	(c) (1) Within 90 days after approval by the [Department] CORPORATION of 26
4236	4236	a request for [matching] funds under subsection (a) of this section, the applicant shall 27
4237	4237	deposit an amount equal to or greater than the amount specified under subsection (a)(2)(ii)2 28
4238	4238	of this section into a fund dedicated to the applicant’s rental assistance program. 29
4239	4239
4240	4240	(2) If an applicant fails to have deposited the amount required under 30
4241	4241	paragraph (1) of this subsection, any portion of funds allocated to the applicant that has 31
4242	4242	not been distributed shall be reallocated to another applicant in accordance with this 32
4243	4243	section. 33
4244	4244
4245	4245	(3) If the [Department] CORPORATION fails to allocate the funds in the 34 HOUSE BILL 498 89
4246	4246
4247	4247
4248	4248	Fund under this [subtitle] PART and rental assistance programs in a single RISE zone 1
4249	4249	have previously received 25% of cumulative program funds from the Fund, the 2
4250	4250	[Department] CORPORATION may distribute additional funds to applicants for that RISE 3
4251	4251	zone in accordance with this [subtitle] PART. 4
4252	4252
4253	4253	(d) (1) On or before September 15 each year, a rental assistance program that 5
4254	4254	has received a distribution of funds from the Fund shall submit to the [Department] 6
4255	4255	CORPORATION an annual report in the form and containing the information required by 7
4256	4256	the [Secretary] CORPORATION . 8
4257	4257
4258	4258	(2) The report required under paragraph (1) of this subsection shall detail 9
4259	4259	the use of funds received under this section for the immediately preceding fiscal year and 10
4260	4260	provide an update on any funds that were not disbursed during that fiscal year. 11
4261	4261
4262	4262	(3) The [Department] CORPORATION may not distribute [matching] 12
4263	4263	funds from the Fund to a rental assistance program under this section if the rental 13
4264	4264	assistance program has failed to submit the report required under paragraph (1) of this 14
4265	4265	subsection. 15
4266	4266
4267	4267	(e) A rental assistance program that receives a distribution [of matching funds] 16
4268	4268	from the Fund shall be subject to an audit at least once every 3 years by an independent 17
4269	4269	certified public accountant that the applicant and the [Department] CORPORATION select. 18
4270	4270
4271	4271	(f) Based on the findings of an audit conducted under subsection (e) of this 19
4272	4272	section, the [Department] CORPORATION may make an assessment against a qualified 20
4273	4273	institution, a county, a municipal corporation, or an economic development agency to 21
4274	4274	recapture any misused or undistributed funds. 22
4275	4275
4276	4276	10–144. 23
4277	4277
4278	4278	(a) There is a Regional Institution Strategic Enterprise Fund in the 24
4279	4279	[Department] CORPORATION . 25
4280	4280
4281	4281	(b) The [Secretary] EXECUTIVE DIRECTOR OF THE CORPORATION shall 26
4282	4282	manage and supervise the Fund. 27
4283	4283
4284	4284	(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 28
4285	4285	the State Finance and Procurement Article. 29
4286	4286
4287	4287	(2) The State Treasurer shall hold the Fund separately, and the 30
4288	4288	Comptroller shall account for the Fund. 31
4289	4289
4290	4290	(d) The Fund consists of: 32
4291	4291
4292	4292	(1) money appropriated in the State budget to the Fund; and 33
4293	4293	90 HOUSE BILL 498
4294	4294
4295	4295
4296	4296	(2) any other money from any other source accepted for the benefit of the 1
4297	4297	Fund. 2
4298	4298
4299	4299	(e) The [Department] CORPORATION may use the Fund to: 3
4300	4300
4301	4301	(1) finance, in coordination with qualified institutions, counties, and 4
4302	4302	municipal corporations, the provision of rental assistance to business entities located in 5
4303	4303	RISE zones; and 6
4304	4304
4305	4305	(2) pay the related administrative, legal, and actuarial expenses of the 7
4306	4306	[Department] CORPORATION . 8
4307	4307
4308	4308	(f) (1) The State Treasurer shall invest the money of the Fund in the same 9
4309	4309	manner as other State money may be invested. 10
4310	4310
4311	4311	(2) Any investment earnings of the Fund shall be credited to the Fund. 11
4312	4312
4313	4313	(g) Expenditures from the Fund may be made only in accordance with the State 12
4314	4314	budget. 13
4315	4315
4316	4316	10–145. 14
4317	4317
4318	4318	[In accordance with § 2.5–109 of this article, the Department] THE CORPORATION 15
4319	4319	shall submit a report on the effectiveness of the tax incentives authorized under this 16
4320	4320	[subtitle] PART WITH THE ANNUAL REPO RT SUBMITTED IN ACCO RDANCE WITH § 17
4321	4321	10–133 OF THIS SUBTITLE . 18
4322	4322
4323	4323	10–146. 19
4324	4324
4325	4325	This [subtitle] PART and the tax credits and benefits authorized under it shall 20
4326	4326	terminate on January 1, 2030. 21
4327	4327
4328	4328	10–147. RESERVED. 22
4329	4329
4330	4330	10–148. RESERVED. 23
4331	4331
4332	4332	Part III. Build Our Future Grant Pilot Program. 24
4333	4333
4334	4334	10–149. 25
4335	4335
4336	4336	(a) In this [subtitle] PART the following words have the meanings indicated. 26
4337	4337
4338	4338	10–150. 27
4339	4339
4340	4340	(a) There is a Build Our Future Grant Pilot Program in the [Department] 28
4341	4341	CORPORATION . 29 HOUSE BILL 498 91
4342	4342
4343	4343
4344	4344
4345	4345	(b) The purpose of the Program is to provide grant funding for infrastructure 1
4346	4346	projects intended to support innovation in an eligible technology sector. 2
4347	4347
4348	4348	(c) Grants may be awarded to private companies, nonprofit entities, local 3
4349	4349	governments, or colleges and universities in the State. 4
4350	4350
4351	4351	(d) The [Department] CORPORATION shall administer the Program. 5
4352	4352
4353	4353	10–151. 6
4354	4354
4355	4355	(a) To carry out the purpose of the Program, the [Department] CORPORATION 7
4356	4356	may award grants in accordance with this [subtitle] PART to approved recipients carrying 8
4357	4357	out infrastructure projects intended to support innovation in any of the [following eligible 9
4358	4358	technology sectors: 10
4359	4359
4360	4360	(1) advanced manufacturing; 11
4361	4361
4362	4362	(2) aerospace; 12
4363	4363
4364	4364	(3) agriculture; 13
4365	4365
4366	4366	(4) artificial intelligence; 14
4367	4367
4368	4368	(5) biotechnology; 15
4369	4369
4370	4370	(6) blue technology; 16
4371	4371
4372	4372	(7) cybersecurity; 17
4373	4373
4374	4374	(8) defense; 18
4375	4375
4376	4376	(9) energy and sustainability; 19
4377	4377
4378	4378	(10) life sciences; 20
4379	4379
4380	4380	(11) quantum; and 21
4381	4381
4382	4382	(12) sensors and robotics] INDUSTRY SECTORS AND ACTIVITIES 22
4383	4383	INCLUDED ON THE LIST DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 23
4384	4384	2.5–106 OF THIS ARTICLE . 24
4385	4385
4386	4386	(b) Examples of eligible projects include: 25
4387	4387
4388	4388	(1) sensitive compartmented information facilities; 26
4389	4389	92 HOUSE BILL 498
4390	4390
4391	4391
4392	4392	(2) wet laboratories; 1
4393	4393
4394	4394	(3) cyber ranges; 2
4395	4395
4396	4396	(4) prototype manufacturing centers; and 3
4397	4397
4398	4398	(5) other specialized workforce training, skill certification, or 4
4399	4399	research–related spaces. 5
4400	4400
4401	4401	(c) Grant awards may be used to defray the cost a grantee incurs to acquire, 6
4402	4402	construct, rehabilitate, install, improve, or equip an eligible innovation infrastructure 7
4403	4403	project. 8
4404	4404
4405	4405	(d) (1) A single entity may be awarded not more than $2,000,000 in grant 9
4406	4406	funds in a fiscal year. 10
4407	4407
4408	4408	(2) (i) For a grant award up to $1,000,000, a grantee shall provide 11
4409	4409	matching funds that are at least 200% of the grant amount. 12
4410	4410
4411	4411	(ii) For a grant award exceeding $1,000,000, and up to $2,000,000, a 13
4412	4412	grantee shall provide matching funds that are at least 400% of the grant amount. 14
4413	4413
4414	4414	(iii) Funds received by a grantee through other State grant programs 15
4415	4415	are not counted toward the grantee’s matching funds requirement. 16
4416	4416
4417	4417	(3) A grantee must demonstrate an ability to cover the full estimated costs 17
4418	4418	of the project for which the grant is awarded. 18
4419	4419
4420	4420	(4) (i) Not more than 50% of the appropriation to the Fund in a fiscal 19
4421	4421	year may be awarded to colleges and universities in that fiscal year. 20
4422	4422
4423	4423	(ii) Grants to colleges and universities from the Fund must be 21
4424	4424	awarded to projects that: 22
4425	4425
4426	4426	1. are performed in collaboration with private industry; or 23
4427	4427
4428	4428	2. offer the prospect of significant economic impact and the 24
4429	4429	opportunity to develop entrepreneurship or clusters of technological innovation in the 25
4430	4430	State. 26
4431	4431
4432	4432	(E) WHEN PROVIDING FUNDIN G FROM THE FUND, THE CORPORATION 27
4433	4433	SHALL PRIORITIZE APP LICANTS LOCATED IN A REGIONAL INSTITUTION STRATEGIC 28
4434	4434	ENTERPRISE ZONE THAT IS DESIGNATED UNDER PART II OF THIS SUBTITLE. 29
4435	4435
4436	4436	10–152. 30
4437	4437
4438	4438	A grantee may be subject to repayment of the grant in an amount determined by the 31 HOUSE BILL 498 93
4439	4439
4440	4440
4441	4441	[Department] CORPORATION if the grantee fails to: 1
4442	4442
4443	4443	(1) comply with reporting requirements established by the [Department] 2
4444	4444	CORPORATION ; or 3
4445	4445
4446	4446	(2) demonstrate appropriate use of grant funds. 4
4447	4447
4448	4448	10–153. 5
4449	4449
4450	4450	(a) There is a Build Our Future Grant Fund. 6
4451	4451
4452	4452	(b) The [Department] CORPORATION shall administer the Fund. 7
4453	4453
4454	4454	(c) The purpose of the Fund is to provide grants for infrastructure projects to 8
4455	4455	support innovation in eligible technology sectors under this [subtitle] PART. 9
4456	4456
4457	4457	(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 10
4458	4458	under § 7–302 of the State Finance and Procurement Article. 11
4459	4459
4460	4460	(2) The State Treasurer shall hold the Fund separately, and the 12
4461	4461	Comptroller shall account for the Fund. 13
4462	4462
4463	4463	(e) The Fund consists of: 14
4464	4464
4465	4465	(1) money appropriated in the State budget to the Fund; 15
4466	4466
4467	4467	(2) any interest earnings of the Fund; and 16
4468	4468
4469	4469	(3) any other money from any other source accepted for the benefit of the 17
4470	4470	Fund. 18
4471	4471
4472	4472	(f) (1) The Fund may be used to: 19
4473	4473
4474	4474	(i) provide grants in accordance with this [subtitle] PART; and 20
4475	4475
4476	4476	(ii) pay the administrative costs of the Program. 21
4477	4477
4478	4478	(2) During each fiscal year, the Department may use not more than 10% of 22
4479	4479	the money appropriated to the Fund to administer the Program. 23
4480	4480
4481	4481	(g) (1) The State Treasurer shall invest the money of the Fund in the same 24
4482	4482	manner as other State money may be invested. 25
4483	4483
4484	4484	(2) Any interest earnings of the Fund shall be credited to the Fund. 26
4485	4485
4486	4486	(h) Expenditures from the Fund may be made only in accordance with the State 27 94 HOUSE BILL 498
4487	4487
4488	4488
4489	4489	budget. 1
4490	4490
4491	4491	10–154. 2
4492	4492
4493	4493	On or before July 1, [2026] 2029, the [Department] CORPORATION shall report to 3
4494	4494	the Governor and, in accordance with § 2–1257 of the State Government Article, the 4
4495	4495	General Assembly on the projects funded through and the economic impact of the Program. 5
4496	4496
4497	4497	10–155. 6
4498	4498
4499	4499	The [Secretary] CORPORATION may adopt regulations to carry out this [subtitle] 7
4500	4500	PART. 8
4501	4501
4502	4502	10–401. 9
4503	4503
4504	4504	(a) In this subtitle the following words have the meanings indicated. 10
4505	4505
4506	4506	(c) “Corporation” means the Maryland Technology Development Corporation. 11
4507	4507
4508	4508	10–408. 12
4509	4509
4510	4510	(a) The Corporation shall adopt regulations establishing: 13
4511	4511
4512	4512	(1) the investment committee; 14
4513	4513
4514	4514	(2) the responsibilities of the investment committee, INCLUDING A 15
4515	4515	PROCESS FOR CONSIDER ING REMEDIES , INCLUDING DIVESTMENT , FOR 16
4516	4516	INVESTMENTS IN A BUS INESS THAT NO LONGER MEETS THE DEFINITION OF A 17
4517	4517	QUALIFIED BUSINESS ; and 18
4518	4518
4519	4519	(3) the procedures for the appointment of investment committee members. 19
4520	4520
4521	4521	10–415. 20
4522	4522
4523	4523	(a) (1) On or before October 1 of each year, the Corporation shall report to the 21
4524	4524	Governor[, the Maryland Economic Development Commission,] and, in accordance with § 22
4525	4525	2–1257 of the State Government Article, the General Assembly. 23
4526	4526
4527	4527	(2) The report required under this subsection shall include: 24
4528	4528
4529	4529	(i) a complete operating and financial statement covering the 25
4530	4530	Corporation’s operations; 26
4531	4531
4532	4532	(ii) a summary of the Corporation’s activities during the preceding 27
4533	4533	fiscal year; 28
4534	4534	HOUSE BILL 498 95
4535	4535
4536	4536
4537	4537	(iii) information on all salaries and any incentives approved by the 1
4538	4538	Board for Corporation employees; 2
4539	4539
4540	4540	(iv) information on outreach, training, mentorship, support, and 3
4541	4541	investment in minority and women–owned qualified businesses, including support for 4
4542	4542	marketing by the Maryland [Small Business Development Financing Authority ] 5
4543	4543	ECONOMIC INCLUSION FUND; 6
4544	4544
4545	4545	(v) information on entities that have current investments and 7
4546	4546	entities that received funding or investments in the current year on the: 8
4547	4547
4548	4548	1. principal business operations; 9
4549	4549
4550	4550	2. number of employees in the State and the number of 10
4551	4551	employees outside the State; 11
4552	4552
4553	4553	3. capital or other investments made in the State; and 12
4554	4554
4555	4555	4. proposed and actual job creation or capital investment in 13
4556	4556	the State as a result of the investment or support; 14
4557	4557
4558	4558	(vi) a list of businesses that have received funding that would no 15
4559	4559	longer qualify as a qualified business; and 16
4560	4560
4561	4561	(vii) information on the creation of and appointments made to an 17
4562	4562	advisory committee and the responsibilities of the advisory committee and members of the 18
4563	4563	committee. 19
4564	4564
4565	4565	(b) (1) On or before October 1 each year, beginning in 2023, and every 6 20
4566	4566	months thereafter, the Corporation shall report to the Governor[, the Maryland Economic 21
4567	4567	Development Commission,] and, in accordance with § 2–1257 of the State Government 22
4568	4568	Article, the Joint Audit and Evaluation Committee and the General Assembly. 23
4569	4569
4570	4570	(2) The report required under this subsection shall include a list of the 24
4571	4571	qualified businesses or other businesses receiving support through programs administered 25
4572	4572	by the Corporation, including those receiving investments made under § 21–123.2 of the 26
4573	4573	State Personnel and Pensions Article. 27
4574	4574
4575	4575	(3) The list of qualified businesses or other businesses receiving support 28
4576	4576	shall include for each business: 29
4577	4577
4578	4578	(i) the number of employees in the State; 30
4579	4579
4580	4580	(ii) the number of employees outside the State; 31
4581	4581
4582	4582	(iii) the capital or other investments made in the State; and 32
4583	4583	96 HOUSE BILL 498
4584	4584
4585	4585
4586	4586	(iv) proposed job creation or capital investment in the State as a 1
4587	4587	result of the investment or support. 2
4588	4588
4589	4589	(c) (1) On or before October 1, 2024, and each October 1 thereafter, the 3
4590	4590	Corporation shall report to the Governor, the Maryland Economic Development 4
4591	4591	Commission, and, in accordance with § 2–1257 of the State Government Article, the 5
4592	4592	General Assembly on the following information from the immediately preceding fiscal year: 6
4593	4593
4594	4594	(i) the number of applications the Corporation received; 7
4595	4595
4596	4596	(ii) the amount of investment funding that was available at the 8
4597	4597	beginning of the fiscal year; 9
4598	4598
4599	4599	(iii) the amount of investment funding that was available at the end 10
4600	4600	of the fiscal year; 11
4601	4601
4602	4602	(iv) the amount of investment funding that was requested; 12
4603	4603
4604	4604	(v) the number of applicants the Corporation invested in; and 13
4605	4605
4606	4606	(vi) the amount of investment funding the Commission awarded. 14
4607	4607
4608	4608	(2) The information reported in accordance with paragraph (1) of this 15
4609	4609	subsection shall: 16
4610	4610
4611	4611	(i) specify which applications and investments were from social 17
4612	4612	impact funds, seed funds, and the Maryland Venture Fund; and 18
4613	4613
4614	4614	(ii) if available, provide information that has been de–identified and 19
4615	4615	disaggregated on applicants and qualified business founders by race, ethnicity, age, gender, 20
4616	4616	disability status, veteran status, and geographic location and the degree to which 21
4617	4617	applicants and founders identify with more than one demographic category. 22
4618	4618
4619	4619	10–470. 23
4620	4620
4621	4621	(a) The Corporation may require that all or part of a grant be repaid, with interest 24
4622	4622	at a rate the Corporation sets, when conditions specified by the Corporation occur. 25
4623	4623
4624	4624	(b) (1) Whenever the Corporation is authorized by law to make a grant, 26
4625	4625	including a grant from the Economic Development Opportunities Program Account 27
4626	4626	authorized under § 7–314 of the State Finance and Procurement Article, the Corporation 28
4627	4627	may use money appropriated for the grant to make an equity investment in a qualified 29
4628	4628	business. 30
4629	4629
4630	4630	(2) (i) Except as provided in subparagraph (ii) of this paragraph and 31
4631	4631	Subtitle 4A of this title, in making an equity investment under this subtitle or Subtitle 4A 32
4632	4632	of this title, the Corporation may not acquire an ownership interest in an enterprise that 33 HOUSE BILL 498 97
4633	4633
4634	4634
4635	4635	exceeds 25%. 1
4636	4636
4637	4637	(ii) In making an equity investment under this subtitle or Subtitle 2
4638	4638	4A of this title in one or more venture or private equity firms, the Corporation may acquire 3
4639	4639	an ownership interest exceeding 25%. 4
4640	4640
4641	4641	(3) Within 15 years after making an equity investment under this subtitle 5
4642	4642	or Subtitle 4A of this title, the Corporation [shall], ON REVIEW AND APPROV AL OF THE 6
4643	4643	CORPORATION ’S INVESTMENT COMMITTEE , MAY divest itself of that investment OR 7
4644	4644	PURSUE ANOTHER REMED Y THAT IS IN THE CORPORATION ’S BEST INTEREST . 8
4645	4645
4646	4646	(4) The liability of the State and the Corporation in making an equity 9
4647	4647	investment under this subtitle or Subtitle 4A of this title is limited to the amount of that 10
4648	4648	investment. 11
4649	4649
4650	4650	10–501. 12
4651	4651
4652	4652	(a) In this subtitle the following words have the meanings indicated. 13
4653	4653
4654	4654	(f) “Corporation” means the Maryland Agricultural and Resource –Based 14
4655	4655	Industry Development Corporation. 15
4656	4656
4657	4657	10–528. 16
4658	4658
4659	4659	(a) On or before October 1 of each year, the Corporation shall report on its status 17
4660	4660	to the Governor, the Maryland Agricultural Commission[, the Maryland Economic 18
4661	4661	Development Commission,] and, in accordance with § 2–1257 of the State Government 19
4662	4662	Article, the General Assembly. 20
4663	4663
4664	4664	(b) The report shall include a complete operating and financial statement and a 21
4665	4665	summary of the Corporation’s activities during the preceding fiscal year. 22
4666	4666
4667	4667	12–201. 23
4668	4668
4669	4669	(a) In this subtitle the following words have the meanings indicated. 24
4670	4670
4671	4671	(k) “MEDCO obligation” means a bond, note, or other similar instrument that the 25
4672	4672	Maryland Economic Development Corporation issues under authority other than this 26
4673	4673	subtitle to finance the cost of infrastructure improvements located in or supporting a 27
4674	4674	transit–oriented development, a sustainable community, a RISE zone, [or] a State hospital 28
4675	4675	redevelopment, OR A PROJECT ALLOWAB LE UNDER THE BUILD OUR FUTURE 29
4676	4676	PROGRAM ESTABLISHED B Y § 10–150 OF THIS ARTICLE . 30
4677	4677
4678	4678	(p) “RISE zone” means an area designated as a Regional Institution Strategic 31
4679	4679	Enterprise zone under [§ 5–1404] § 10–140 of this article. 32
4680	4680	98 HOUSE BILL 498
4681	4681
4682	4682
4683	4683	12–207. 1
4684	4684
4685	4685	(a) Except as provided in subsections (b) and (e) of this section, bond proceeds 2
4686	4686	may be used only: 3
4687	4687
4688	4688	(1) to buy, lease, condemn, or otherwise acquire property, or an interest in 4
4689	4689	property: 5
4690	4690
4691	4691	(i) in the development district, a RISE zone, or a sustainable 6
4692	4692	community; or 7
4693	4693
4694	4694	(ii) needed for a right–of–way or other easement to or from the 8
4695	4695	development district, a RISE zone, or a sustainable community; 9
4696	4696
4697	4697	(2) for site removal; 10
4698	4698
4699	4699	(3) for surveys and studies; 11
4700	4700
4701	4701	(4) to relocate businesses or residents; 12
4702	4702
4703	4703	(5) to install utilities, construct parks and playgrounds, and for other 13
4704	4704	needed improvements including: 14
4705	4705
4706	4706	(i) roads to, from, or in the development district; 15
4707	4707
4708	4708	(ii) parking; and 16
4709	4709
4710	4710	(iii) lighting; 17
4711	4711
4712	4712	(6) to construct or rehabilitate buildings for a governmental purpose or use; 18
4713	4713
4714	4714	(7) for reserves or capitalized interest; 19
4715	4715
4716	4716	(8) for necessary costs to issue bonds; and 20
4717	4717
4718	4718	(9) to pay the principal of and interest on loans, advances, or indebtedness 21
4719	4719	that a political subdivision incurs for a purpose specified in this section. 22
4720	4720
4721	4721	(b) (1) This subsection applies to a sustainable community identified under § 23
4722	4722	12–203 of this subtitle. 24
4723	4723
4724	4724	(2) In addition to the purposes under subsection (a) of this section and 25
4725	4725	without limiting the purposes in subsection (a) of this section, bond proceeds may be used 26
4726	4726	in a sustainable community for: 27
4727	4727
4728	4728	(i) historic preservation or rehabilitation; 28
4729	4729	HOUSE BILL 498 99
4730	4730
4731	4731
4732	4732	(ii) environmental remediation, demolition, and site preparation; 1
4733	4733
4734	4734	(iii) parking lots, facilities, or structures of any type whether for 2
4735	4735	public or private use; 3
4736	4736
4737	4737	(iv) highways as defined in § 8–101 of the Transportation Article or 4
4738	4738	transit service as defined in § 7–101 of the Transportation Article that support sustainable 5
4739	4739	communities; 6
4740	4740
4741	4741	(v) schools; 7
4742	4742
4743	4743	(vi) affordable or mixed income housing; [and] 8
4744	4744
4745	4745	(vii) stormwater management and storm drain facilities; AND 9
4746	4746
4747	4747	(VIII) INNOVATION CENTERS , SENSITIVE COMPARTMEN TED 10
4748	4748	INFORMATION FACILITI ES, AND STRUCTURES OF ANY TYPE THAT SUP PORT THE 11
4749	4749	RETENTION, EXPANSION, OR ATTRACTION OF BUS INESS ACTIVITIES INC LUDED ON 12
4750	4750	THE LIST OF INDUSTRI ES AND ACTIVITIES DE VELOPED BY THE DEPARTMENT IN 13
4751	4751	ACCORDANCE WITH § 2.5–106 OF THIS ARTICLE . 14
4752	4752
4753	4753	(e) (1) This subsection applies to a RISE zone identified under § 12–203 of this 15
4754	4754	subtitle. 16
4755	4755
4756	4756	(2) In addition to the purposes under subsection (a) of this section and 17
4757	4757	without limiting the purposes in subsection (a) of this section, bond proceeds may be used 18
4758	4758	in a RISE zone for: 19
4759	4759
4760	4760	(i) historic preservation or rehabilitation; 20
4761	4761
4762	4762	(ii) environmental remediation, demolition, and site preparation; 21
4763	4763
4764	4764	(iii) parking lots, facilities, or structures of any type whether for 22
4765	4765	public or private use; 23
4766	4766
4767	4767	(iv) schools; 24
4768	4768
4769	4769	(v) affordable or mixed income housing; 25
4770	4770
4771	4771	(vi) stormwater management and storm drain facilities; 26
4772	4772
4773	4773	(vii) innovation centers, SENSITIVE COMPARTMEN TED 27
4774	4774	INFORMATION FACILITI ES, and laboratory facilities, or structures of any type whether 28
4775	4775	for public or private use, including maintenance and installation of improvements in the 29
4776	4776	structures and services that support the purposes of the RISE zone program; and 30
4777	4777	100 HOUSE BILL 498
4778	4778
4779	4779
4780	4780	(viii) any other facilities or structures of any type whether for public 1
4781	4781	or private use that support the purposes of the RISE zone program. 2
4782	4782
4783	4783	16–102. 3
4784	4784
4785	4785	(d) (2) Any money that has not been distributed or awarded on or before 4
4786	4786	December 31, 2024, shall revert to the Maryland Economic [Development Assistance] 5
4787	4787	COMPETITIVENESS Fund. 6
4788	4788
4789	4789	Article – Corporations and Associations 7
4790	4790
4791	4791	1–203. 8
4792	4792
4793	4793	(b) (14) BEGINNING IN FISCAL Y EAR 2026, THE DEPARTMENT SHALL 9
4794	4794	WAIVE THE FILING FEE FOR A BUSINESS ENTIT Y DESCRIBED UNDER PA RAGRAPH 10
4795	4795	(3)(II) OF THIS SUBSECTION F OR EACH YEAR THAT TH E ENTITY PROVIDES EV IDENCE 11
4796	4796	TO THE DEPARTMENT THAT THE E NTITY: 12
4797	4797
4798	4798	(I) HAS LOCATED WITHIN A REGIONAL INSTITUTION 13
4799	4799	STRATEGIC ENTERPRISE ZONE THAT IS DESIGNATED UNDER TITLE 10, SUBTITLE 1 14
4800	4800	OF THE ECONOMIC DEVELOPMENT ARTICLE WITHIN 3 YEARS OF THE DATE BY 15
4801	4801	WHICH THE FILING FEE IS DUE; AND 16
4802	4802
4803	4803	(II) IS ENCOMPASSED BY THE INDUSTRY SECTORS AND 17
4804	4804	ACTIVITIES INCLUDED ON THE LI ST DEVELOPED BY THE DEPARTMENT OF 18
4805	4805	COMMERCE IN ACCORDANC E WITH § 2.5–106 OF THE ECONOMIC DEVELOPMENT 19
4806	4806	ARTICLE. 20
4807	4807
4808	4808	[(14)] (15) There is no processing fee for documents filed to dissolve, cancel, 21
4809	4809	or terminate an entity under this subsection. 22
4810	4810
4811	4811	Article – Education 23
4812	4812
4813	4813	9.5–113.1. 24
4814	4814
4815	4815	(a) (1) In this section the following words have the meanings indicated. 25
4816	4816
4817	4817	(2) “CHILD CARE SLOT ” MEANS SPACE AVAILABL E FOR A CHILD TO 26
4818	4818	ENROLL FOR A FULL 8–HOUR DAY OF CHILD CA RE. 27
4819	4819
4820	4820	(3) “ENOUGH ELIGIBLE NEIGHB ORHOOD” MEANS AN AREA THAT 28
4821	4821	HAS BEEN DESIGNATED IN ACCORDANCE WITH § 9–2803 OF THE STATE 29
4822	4822	GOVERNMENT ARTICLE. 30
4823	4823
4824	4824	[(2)] (4) “Fund” means the Child Care Capital Support Revolving Loan 31 HOUSE BILL 498 101
4825	4825
4826	4826
4827	4827	Fund. 1
4828	4828
4829	4829	[(3)] (5) “Rural community” has the meaning stated in § 2–207 of the 2
4830	4830	State Finance and Procurement Article. 3
4831	4831
4832	4832	(6) “SECRETARY” MEANS THE SECRETARY OF COMMERCE. 4
4833	4833
4834	4834	(b) There is a Child Care Capital Support Revolving Loan Fund. 5
4835	4835
4836	4836	(c) The purpose of the Fund is to provide no–interest loans for capital expenses 6
4837	4837	to child care providers who participate in the Child Care Scholarship Program under § 7
4838	4838	9.5–113 of this subtitle. 8
4839	4839
4840	4840	(d) The Department of Commerce shall administer the Fund with support from 9
4841	4841	the Department. 10
4842	4842
4843	4843	(e) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 11
4844	4844	the State Finance and Procurement Article that shall be available in perpetuity for the 12
4845	4845	purpose of providing loans in accordance with the provisions of this section. 13
4846	4846
4847	4847	(2) The State Treasurer shall hold the Fund separately, and the 14
4848	4848	Comptroller shall account for the Fund. 15
4849	4849
4850	4850	(f) The Fund consists of: 16
4851	4851
4852	4852	(1) Money appropriated in the State budget to the Fund; 17
4853	4853
4854	4854	(2) Any interest earnings of the Fund; 18
4855	4855
4856	4856	(3) Repayments of principal and interest from loans made from the Fund; 19
4857	4857	and 20
4858	4858
4859	4859	(4) Any other money from any other source accepted for the benefit of the 21
4860	4860	Fund. 22
4861	4861
4862	4862	(g) (1) The Fund may be used only to provide no–interest loans to child care 23
4863	4863	providers for capital expenses related to a child care facility, including: 24
4864	4864
4865	4865	(i) Acquisition; 25
4866	4866
4867	4867	(ii) Expansion; 26
4868	4868
4869	4869	(iii) [Renovations; and 27
4870	4870
4871	4871	(iv)] New construction; AND 28
4872	4872	102 HOUSE BILL 498
4873	4873
4874	4874
4875	4875	(IV) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , 1
4876	4876	RENOVATIONS . 2
4877	4877
4878	4878	[(2) (i) Except as provided in subparagraph (ii) of this paragraph, child 3
4879	4879	care providers shall repay loans from the Fund not later than 5 years after receiving a loan 4
4880	4880	from the Fund. 5
4881	4881
4882	4882	(ii) The Department of Commerce may establish a financial 6
4883	4883	hardship exemption to allow a child care provider additional time to repay a loan from the 7
4884	4884	Fund. 8
4885	4885
4886	4886	(iii) If a hardship exemption is not granted, the Department of 9
4887	4887	Commerce shall apply its normal policy regarding assisting child care providers with past 10
4888	4888	due loan payments.] 11
4889	4889
4890	4890	(2) LOANS PROVIDED FOR RE NOVATIONS UNDER PARA GRAPH (1)(IV) 12
4891	4891	OF THIS SUBSECTION M AY: 13
4892	4892
4893	4893	(I) BE PROVIDED ONLY TO A FAMILY CHILD CARE HOME OR 14
4894	4894	LARGE FAMILY CHILD C ARE HOME; AND 15
4895	4895
4896	4896	(II) BE PROVIDED ONLY FOR RENOVATIONS NECESSAR Y TO 16
4897	4897	MAINTAIN LICENSURE B Y THE DEPARTMENT AS DEMONST RATED THROUGH 17
4898	4898	DOCUMENTS REQUIRED B Y THE DEPARTMENT OF COMMERCE AND VERIFIED BY 18
4899	4899	THE DEPARTMENT . 19
4900	4900
4901	4901	(3) (I) THE TERM OF A LOAN FR OM THE FUND SHALL BE 20
4902	4902	DETERMINED BY THE DEPARTMENT OF COMMERCE. 21
4903	4903
4904	4904	(II) THE TERM SET BY THE DEPARTMENT OF COMMERCE SHALL 22
4905	4905	BE FOR NOT LESS THAN 5 YEARS. 23
4906	4906
4907	4907	(4) UP TO $50,000 OF A LOAN PROVIDED T O A FAMILY CHILD CARE 24
4908	4908	HOME OR LARGE FAMILY CHILD CARE HOME MAY BE CONVERTED TO A GR ANT ON 25
4909	4909	APPROVAL BY THE DEPARTMENT OF COMMERCE IN ACCORDANC E WITH 26
4910	4910	SUBSECTION (I)(2) OF THIS SECTION. 27
4911	4911
4912	4912	(h) (1) The State Treasurer shall invest the money of the Fund in the same 28
4913	4913	manner as other State money may be invested. 29
4914	4914
4915	4915	(2) Any interest earnings of the Fund shall be credited to the Fund. 30
4916	4916
4917	4917	(i) (1) The Department of Commerce, in consultation with the Department, 31
4918	4918	shall establish application procedures and eligibility criteria for loans from the Fund, in 32
4919	4919	addition to the requirement that a child care provider be a participant in the Child Care 33 HOUSE BILL 498 103
4920	4920
4921	4921
4922	4922	Scholarship Program under § 9.5–113 of this subtitle. 1
4923	4923
4924	4924	(2) [The] IN ORDER TO HAVE A LO AN OR PART OF A LOAN CONVERTED 2
4925	4925	TO A GRANT UNDER SUB SECTION (G)(4) OF THIS SECTION , A FAMILY CHILD CARE 3
4926	4926	HOME OR LARGE FAMILY CHILD CARE HOME SHAL L DEMONSTRATE ATTAIN MENT OF 4
4927	4927	AT LEAST A QUALITY R ATING 3 ON THE MARYLAND EXCELS PROGRAM. 5
4928	4928
4929	4929	(3) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 6
4930	4930	THE Department OF COMMERCE shall prioritize applicant criteria in the following order 7
4931	4931	when providing funding from the Fund: 8
4932	4932
4933	4933	[(i) Child care providers that are located in: 9
4934	4934
4935	4935	1. Underserved communities; or 10
4936	4936
4937	4937	2. Areas designated by the Department as areas lacking 11
4938	4938	child care slots; 12
4939	4939
4940	4940	(ii) Child care providers that are located in rural communities; 13
4941	4941
4942	4942	(iii) Child care providers that serve primarily low –income 14
4943	4943	populations in areas of high poverty;] 15
4944	4944
4945	4945	(I) CHILD CARE PROVIDERS THAT WILL INCREASE T HE 16
4946	4946	NUMBER OF AVAILABLE CHILD CARE SLOTS THE CHILD CARE PROVIDER MAY OFFER; 17
4947	4947
4948	4948	(II) CHILD CARE PROVIDERS THAT ARE LOCATED IN AREAS 18
4949	4949	IDENTIFIED BY THE DEPARTMENT AS LACKING CHILD CARE SLOTS ; 19
4950	4950
4951	4951	(III) CHILD CARE PROVIDERS THAT SERVE PRIMARILY IN AN 20
4952	4952	ENOUGH ELIGIBLE NEIGHBORHOO D; 21
4953	4953
4954	4954	(iv) Child care providers that serve children with special needs; and 22
4955	4955
4956	4956	(v) Child care providers that serve children ages 2 and younger. 23
4957	4957
4958	4958	(4) (I) THE STATE SUPERINTENDENT AND TH E SECRETARY MAY 24
4959	4959	TEMPORARILY ALTER TH E PRIORITIZATION ORD ER OF APPLICATIONS TO BEST 25
4960	4960	MEET THE NEEDS OF TH E CHILD CARE INDUSTR Y AT A GIVEN TIME. 26
4961	4961
4962	4962	(II) SHOULD THE STATE SUPERINTENDENT AND TH E 27
4963	4963	SECRETARY CHOOSE TO A LTER THE PRIORITIZAT ION ORDER OF APPLICA TIONS, THE 28
4964	4964	NEW TEMPORARY PRIORI TIZATION ORDER SHALL BE COMMUNICATED ON T HE 29
4965	4965	DEPARTMENT OF COMMERCE WEBSITE PRIO R TO ACCEPTING APPLI CATIONS. 30
4966	4966	104 HOUSE BILL 498
4967	4967
4968	4968
4969	4969	(j) The Department of Commerce shall work with the Department to publicize 1
4970	4970	the availability of loans from the Fund and provide support to child care providers in 2
4971	4971	applying for loans from the Fund. 3
4972	4972
4973	4973	(k) (1) For fiscal year 2023, the Governor shall include in the annual budget 4
4974	4974	bill an appropriation to the Fund of $15,000,000. 5
4975	4975
4976	4976	(2) For fiscal year 2024, the Governor shall include in the annual budget 6
4977	4977	bill an appropriation to the Fund of $10,000,000. 7
4978	4978
4979	4979	Article – Housing and Community Development 8
4980	4980
4981	4981	4–509. 9
4982	4982
4983	4983	(a) (1) In this section the following words have the meanings indicated. 10
4984	4984
4985	4985	(2) “Anchor institution” means: 11
4986	4986
4987	4987	(i) an institution of higher education in the State, including 12
4988	4988	departments, foundations, and other entities of the institution; or 13
4989	4989
4990	4990	(ii) a hospital institution in the State, including departments, 14
4991	4991	foundations, and other entities of the institution, that: 15
4992	4992
4993	4993	1. has a group of at least five physicians who are organized 16
4994	4994	as a medical staff for the institution; 17
4995	4995
4996	4996	2. maintains facilities to provide, under the supervision of 18
4997	4997	the medical staff, diagnostic and treatment services for two or more unrelated individuals; 19
4998	4998	and 20
4999	4999
5000	5000	3. admits or retains the individuals for overnight care. 21
5001	5001
5002	5002	(3) “Blighted area” means an area in which a majority of buildings have 22
5003	5003	declined in productivity by reason of obsolescence, depreciation, or other causes to an extent 23
5004	5004	that they no longer justify fundamental repairs and adequate maintenance. 24
5005	5005
5006	5006	(4) “Fund” means the Seed Community Development Anchor Institution 25
5007	5007	Fund. 26
5008	5008
5009	5009	(5) “RISE ZONE CATCHMENT AREA ” MEANS A GEOGRAPHIC A REA 27
5010	5010	LOCATED WITHIN A 5–MILE RADIUS OF THE C ENTER POINT OF A QUA LIFIED 28
5011	5011	INSTITUTION THAT IS LOCATED IN AN ACTIVE REGIONAL INSTITUTION STRATEGIC 29
5012	5012	ENTERPRISE ZONE DESIGNATED UNDER TITLE 10, SUBTITLE 1 OF THE ECONOMIC 30
5013	5013	DEVELOPMENT ARTICLE. 31
5014	5014	HOUSE BILL 498 105
5015	5015
5016	5016
5017	5017	(6) “Sustainable community” means an area designated as a sustainable 1
5018	5018	community under § 6–205 of this article. 2
5019	5019
5020	5020	(b) There is a Seed Community Development Anchor Institution Fund. 3
5021	5021
5022	5022	(c) The purpose of the Fund is to provide grants and loans to anchor institutions 4
5023	5023	for community development projects in RISE ZONE CATCHMENT AREAS , sustainable 5
5024	5024	communities, and blighted areas of the State. 6
5025	5025
5026	5026	(d) The Department shall administer the Fund. 7
5027	5027
5028	5028	(e) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 8
5029	5029	the State Finance and Procurement Article. 9
5030	5030
5031	5031	(2) The State Treasurer shall hold the Fund separately, and the 10
5032	5032	Comptroller shall account for the Fund. 11
5033	5033
5034	5034	(f) The Fund consists of: 12
5035	5035
5036	5036	(1) money appropriated in the State budget to the Fund; 13
5037	5037
5038	5038	(2) interest earnings of the Fund; and 14
5039	5039
5040	5040	(3) any other money from any other source accepted for the benefit of the 15
5041	5041	Fund. 16
5042	5042
5043	5043	(g) (1) The Fund may be used only to provide grants and loans to anchor 17
5044	5044	institutions for community development projects in RISE ZONE CATCHMENT AREAS , 18
5045	5045	sustainable communities, and blighted areas of the State. 19
5046	5046
5047	5047	(2) To be eligible for a grant or loan, an anchor institution shall provide 20
5048	5048	evidence of matching funds. 21
5049	5049
5050	5050	(3) The Department shall award grants and loans from the Fund on a 22
5051	5051	competitive basis. 23
5052	5052
5053	5053	(4) WHEN PROVIDING GRANTS AND LOANS FROM THE FUND, THE 24
5054	5054	DEPARTMENT SHALL PRIO RITIZE APPLICANTS LO CATED IN AN ACTIVE REGIONAL 25
5055	5055	INSTITUTION STRATEGIC ENTERPRISE ZONE DESIGNATED UNDER TITLE 10, 26
5056	5056	SUBTITLE 1 OF THE ECONOMIC DEVELOPMENT ARTICLE. 27
5057	5057
5058	5058	(h) (1) The State Treasurer shall invest the money of the Fund in the same 28
5059	5059	manner as other State money may be invested. 29
5060	5060
5061	5061	(2) Any interest earnings of the Fund shall be credited to the Fund. 30
5062	5062	106 HOUSE BILL 498
5063	5063
5064	5064
5065	5065	(i) Expenditures from the Fund may be made only in accordance with the State 1
5066	5066	budget. 2
5067	5067
5068	5068	(j) (1) For fiscal year 2019, the Governor shall include in the annual budget 3
5069	5069	bill or the capital budget bill an appropriation of $4,000,000 to the Fund. 4
5070	5070
5071	5071	(2) For fiscal year 2020, the Governor shall include in the annual budget 5
5072	5072	bill or the capital budget bill an appropriation of $5,000,000 for the Fund. 6
5073	5073
5074	5074	(3) (i) For fiscal year 2021, the Governor shall include in the annual 7
5075	5075	budget bill or the capital budget bill an appropriation of $5,000,000 for the Fund. 8
5076	5076
5077	5077	(ii) For fiscal year 2022 and each fiscal year thereafter, the Governor 9
5078	5078	shall include in the annual budget bill or the capital budget bill an appropriation of 10
5079	5079	$10,000,000 for the Fund. 11
5080	5080
5081	5081	6.5–107. 12
5082	5082
5083	5083	(e) The Fund consists of: 13
5084	5084
5085	5085	(2) money appropriated in the State budget to the Maryland Economic 14
5086	5086	[Development Assistance] COMPETITIVENESS Fund under Title 5, Subtitle 3 of the 15
5087	5087	Economic Development Article for the purpose of assisting in the establishment of 16
5088	5088	broadband communication services in rural and underserved areas of the State; 17
5089	5089
5090	5090	Article – State Finance and Procurement 18
5091	5091
5092	5092	7–314. 19
5093	5093
5094	5094	(a) (1) In this section the following words have the meanings indicated. 20
5095	5095
5096	5096	(2) [“Account” means the Economic Development Opportunities Program 21
5097	5097	Account.] “DEPARTMENT ” MEANS THE DEPARTMENT OF COMMERCE. 22
5098	5098
5099	5099	(3) [“Executive agency” means an executive department or agency in the 23
5100	5100	Executive Branch of State government, including all offices of the Executive Department 24
5101	5101	or agency directly responsible to the Governor. 25
5102	5102
5103	5103	(4)] “Extraordinary economic development opportunity” means the: 26
5104	5104
5105	5105	(i) attraction of a new private sector enterprise to the State or 27
5106	5106	retention or expansion of an existing private sector enterprise in the State that: 28
5107	5107
5108	5108	1. maintains a strong financial condition and minimal credit 29
5109	5109	risk profile; 30
5110	5110	HOUSE BILL 498 107
5111	5111
5112	5112
5113	5113	2. is capable of accessing alternative sources of financing 1
5114	5114	through financial institutions or capital markets; 2
5115	5115
5116	5116	3. is consistent with the strategic plan of the State for 3
5117	5117	economic development; AND 4
5118	5118
5119	5119	4. creates or retains substantial employment, particularly in 5
5120	5120	areas of high unemployment; [and 6
5121	5121
5122	5122	5. invests in capital at a level equal to five times the value of 7
5123	5123	the incentive offered;] 8
5124	5124
5125	5125	(ii) retention or expansion of an existing public institution, private 9
5126	5126	institution, or federal research and development institute that: 10
5127	5127
5128	5128	1. is consistent with the strategic plan of the State for 11
5129	5129	economic development; and 12
5130	5130
5131	5131	2. creates or retains substantial employment, particularly in 13
5132	5132	areas of high unemployment; or 14
5133	5133
5134	5134	(iii) establishment or attraction of a public institution, a private 15
5135	5135	institution, or a federal research and development institute new to the State that: 16
5136	5136
5137	5137	1. is consistent with the strategic plan of the State for 17
5138	5138	economic development; and 18
5139	5139
5140	5140	2. creates or retains substantial employment, particularly in 19
5141	5141	areas of high unemployment. 20
5142	5142
5143	5143	(4) “FUND” MEANS THE STRATEGIC CLOSING FUND. 21
5144	5144
5145	5145	(5) (i) “Performance requirement” means a contractual agreeme nt 22
5146	5146	between an executive agency and [an Account] A FUND recipient that requires the 23
5147	5147	[Account] FUND recipient to meet minimum economic development outcomes in exchange 24
5148	5148	for a grant or a loan under this section. 25
5149	5149
5150	5150	(ii) “Performance requirement” includes claw –back, penalty, 26
5151	5151	rescission, and recalibration clauses that utilize job creation, capital investment, and other 27
5152	5152	measures of economic development. 28
5153	5153
5154	5154	(6) “Private sector enterprise” means any commercial, industrial, 29
5155	5155	educational, or research organization which is not a part of or controlled by a federal, State, 30
5156	5156	or local government agency. 31
5157	5157
5158	5158	(b) Subject to the provisions of this section, the [Economic Development 32 108 HOUSE BILL 498
5159	5159
5160	5160
5161	5161	Opportunities Program Account] STRATEGIC CLOSING FUND is established WITHIN THE 1
5162	5162	DEPARTMENT to maximize extraordinary economic development opportunities. 2
5163	5163
5164	5164	(c) [Subject to subsection (r) of this section, the] THE Governor may provide an 3
5165	5165	appropriation in the budget bill to the [Account] FUND for a specific or general purpose or 4
5166	5166	purposes. 5
5167	5167
5168	5168	(d) After notice to and approval by the Legislative Policy Committee, the 6
5169	5169	Governor may transfer funds by budget amendment [from the Economic Development 7
5170	5170	Opportunities Program Account to the expenditure account of the appropriate executive 8
5171	5171	agency] TO THE FUND. 9
5172	5172
5173	5173	(e) (1) The [Account] FUND is a continuing, nonlapsing fund which is not 10
5174	5174	subject to § 7–302 of this subtitle. 11
5175	5175
5176	5176	(2) The Treasurer shall separately hold, and the Comptroller shall account 12
5177	5177	for, the [Account] FUND. 13
5178	5178
5179	5179	(3) The [Account] FUND shall be invested and reinvested in the same 14
5180	5180	manner as other State funds. 15
5181	5181
5182	5182	(4) [Except as provided in paragraph (5) of this subsection, any] ANY 16
5183	5183	investment earnings shall be subject to § 7–311(d) of this subtitle. 17
5184	5184
5185	5185	[(5) Any investment earnings on money transferred from the Account to a 18
5186	5186	second continuing, nonlapsing fund may be retained to the credit of the second fund.] 19
5187	5187
5188	5188	(f) (1) Money appropriated or credited to the [Account] FUND does not revert 20
5189	5189	to the Revenue Stabilization Account. 21
5190	5190
5191	5191	(2) [Except as provided in paragraph (3) of this subsection, repayments] 22
5192	5192	REPAYMENTS of principal or interest on any loan from the [Account] FUND shall be 23
5193	5193	retained to the credit of the [Account] FUND. 24
5194	5194
5195	5195	[(3) Repayments of principal or interest on any loan made from money 25
5196	5196	transferred from the Account to a second continuing, nonlapsing fund may be retained to 26
5197	5197	the credit of the second fund.] 27
5198	5198
5199	5199	(g) (1) The Department [of Commerce] shall include the following information 28
5200	5200	in the report that is required under § 2.5–109 of the Economic Development Article: 29
5201	5201
5202	5202	(i) the financial status of the program and a summary of its 30
5203	5203	operations for the preceding fiscal year; 31
5204	5204
5205	5205	(ii) for the previous 3 fiscal years, the status of [Account] FUND 32 HOUSE BILL 498 109
5206	5206
5207	5207
5208	5208	disbursements for economic development projects reviewed by the Legislative Policy 1
5209	5209	Committee under this section; 2
5210	5210
5211	5211	(iii) for the previous 3 fiscal years, the status of job creation, capital 3
5212	5212	investment, and other measures of economic development for each economic development 4
5213	5213	project reviewed by the Legislative Policy Committee under this section; 5
5214	5214
5215	5215	(iv) a list of guidelines for the kinds of performance requirements 6
5216	5216	that may be negotiated with the loan or grant applicant; and 7
5217	5217
5218	5218	(v) an explanation of the job creation, capital investment, and other 8
5219	5219	measures of economic development described in items (i) through (iii) of this paragraph are 9
5220	5220	lower than negotiated according to subsection (h)(1) of this section. 10
5221	5221
5222	5222	(2) Upon receipt of the information that is required to be reported under 11
5223	5223	this subsection, the Legislative Policy Committee shall have 60 days to review and 12
5224	5224	comment on the information provided by the Department [of Commerce] under paragraph 13
5225	5225	(1) of this subsection, during which time the Department [of Commerce] shall provide any 14
5226	5226	additional information regarding the [Account] FUND as requested by the Legislative 15
5227	5227	Policy Committee. 16
5228	5228
5229	5229	(h) (1) Except as provided in paragraph (2) of this subsection and in subsection 17
5230	5230	(i) of this section, any funds transferred from the [Economic Development Opportunities 18
5231	5231	Program Account] FUND shall be used only for extraordinary economic development 19
5232	5232	opportunities that: 20
5233	5233
5234	5234	(i) meet the criteria provided in this section; 21
5235	5235
5236	5236	(ii) include performance requirements; and 22
5237	5237
5238	5238	(iii) in addition to the performance requirements under item (ii) of 23
5239	5239	this paragraph, include a performance requirement that utilizes a claw–back provision. 24
5240	5240
5241	5241	(2) The [Account] DEPARTMENT may UTILIZE THE FUND TO pay an 25
5242	5242	executive agency for administrative, legal, or actuarial expenses incurred by the [agency in 26
5243	5243	connection with transactions funded by transfers of money to the agency from the Account] 27
5244	5244	DEPARTMENT . 28
5245	5245
5246	5246	(i) (1) The Legislative Policy Committee may approve an economic 29
5247	5247	development opportunity that is not an extraordinary economic development opportunity 30
5248	5248	if the executive agency requesting the transfer of funds offers a detailed justification for the 31
5249	5249	exception. 32
5250	5250
5251	5251	(2) The Legislative Policy Committee shall give particular consideration to 33
5252	5252	an exception that would provide a significant economic development opportunity for an area 34
5253	5253	of the State that has a relatively high unemployment rate or relatively low per capita 35 110 HOUSE BILL 498
5254	5254
5255	5255
5256	5256	income. 1
5257	5257
5258	5258	(j) [(1)] The Department of Commerce may modify the guidelines for the kinds 2
5259	5259	of performance requirements that may be negotiated with the loan or grant as needed, upon 3
5260	5260	approval of the Legislative Policy Committee. 4
5261	5261
5262	5262	[(2) An executive agency may depart from these guidelines as needed, upon 5
5263	5263	approval of the Legislative Policy Committee.] 6
5264	5264
5265	5265	(k) Subject to the provisions of this subtitle, funds [transferred] from the 7
5266	5266	[Economic Development Opportunities Program Account, to an executive agency,] FUND 8
5267	5267	may be loaned, granted, or invested for: 9
5268	5268
5269	5269	(1) assisting in the retention or expansion of existing private sector 10
5270	5270	enterprises, public or private institutions, or federal research and development institutes; 11
5271	5271
5272	5272	(2) assisting in the establishment or attraction of private sector 12
5273	5273	enterprises, public or private institutions, or federal research and development institutes 13
5274	5274	new to this State; or 14
5275	5275
5276	5276	(3) providing assistance where existing State or local programs lack 15
5277	5277	sufficient resources or are constrained by timing or program design from being utilized. 16
5278	5278
5279	5279	(l) [Upon submission to the Legislative Policy Committee of a proposed budget 17
5280	5280	amendment to transfer money from the Account, the Governor] BEFORE FUNDS FROM 18
5281	5281	THE FUND MAY BE LOANED , GRANTED, OR INVESTED IN ACCOR DANCE WITH 19
5282	5282	SUBSECTION (K) OF THIS SECTION , THE DEPARTMENT shall provide, subject to § 20
5283	5283	2–1257 of the State Government Article, to the Legislative Policy Committee: 21
5284	5284
5285	5285	(1) a detailed description of: 22
5286	5286
5287	5287	(i) the proposed use of the funds; 23
5288	5288
5289	5289	(ii) the manner in which the proposed use meets the criteria as set 24
5290	5290	forth in this section; 25
5291	5291
5292	5292	(iii) the degree to which the proposed use of funds will advance 26
5293	5293	statewide or local economic development strategies and objectives; and 27
5294	5294
5295	5295	(iv) the degree to which available sources of federal, State, local, and 28
5296	5296	private financial support have been sought and will be utilized; 29
5297	5297
5298	5298	(2) the terms, conditions, and performance requirements of any grant or 30
5299	5299	loan for which the funds are to be used; 31
5300	5300
5301	5301	(3) a comprehensive economic analysis of the proposed use of the funds 32 HOUSE BILL 498 111
5302	5302
5303	5303
5304	5304	which estimates: 1
5305	5305
5306	5306	(i) the economic impact to the State and the local jurisdictions 2
5307	5307	affected; 3
5308	5308
5309	5309	(ii) a minimum level of net economic benefits to the public sector; 4
5310	5310
5311	5311	(iii) the number of jobs expected to be created as a result of the 5
5312	5312	proposed economic development project and the percentage of those jobs that are expected 6
5313	5313	to be held by Maryland residents; 7
5314	5314
5315	5315	(iv) the wage rates and benefit packages for the jobs expected to be 8
5316	5316	created as a result of the proposed economic development project; and 9
5317	5317
5318	5318	(v) any other appropriate financial or economic benefits; 10
5319	5319
5320	5320	(4) any other analysis or information that is requested by the Legislative 11
5321	5321	Policy Committee; and 12
5322	5322
5323	5323	(5) the date on which the executive agency expects to disburse the funds to 13
5324	5324	the proposed recipient. 14
5325	5325
5326	5326	(m) [If an executive agency fails to disburse transferred funds to a recipient within 15
5327	5327	1 year after the expected disbursement date presented to the Legislative Policy Committee 16
5328	5328	under subsection (l) of this section, the funds will revert back to the Account and the 17
5329	5329	Governor shall: 18
5330	5330
5331	5331	(1) resubmit the proposed budget amendment to transfer money from the 19
5332	5332	Account to the Legislative Policy Committee; and 20
5333	5333
5334	5334	(2) provide the Legislative Policy Committee with the information required 21
5335	5335	under subsection (l) of this section. 22
5336	5336
5337	5337	(n)] Funds appropriated to the [Economic Development Opportunities Program 23
5338	5338	Account] FUND may not be loaned, granted, or invested for: 24
5339	5339
5340	5340	(1) substituting for funds from other State or local programs for which a 25
5341	5341	project may be eligible and sufficient resources exist; 26
5342	5342
5343	5343	(2) projects which are not likely to attract or retain employment 27
5344	5344	opportunities; 28
5345	5345
5346	5346	(3) funding projects located outside the State; 29
5347	5347
5348	5348	(4) construction or land acquisition by the Maryland Stadium Authority; or 30
5349	5349
5350	5350	(5) funding for any sports activity or facility. 31 112 HOUSE BILL 498
5351	5351
5352	5352
5353	5353
5354	5354	[(o) (1) This subsection does not apply to an economic development opportunity 1
5355	5355	located in an area designated as a qualified opportunity zone under § 1400Z–1 of the 2
5356	5356	Internal Revenue Code in Allegany County, Garrett County, Somerset County, or Wicomico 3
5357	5357	County. 4
5358	5358
5359	5359	(2) In the case of an economic development opportunity located outside a 5
5360	5360	priority funding area as established under Title 5, Subtitle 7B of this article, the 6
5361	5361	Department shall first comply with the provisions of that subtitle before making a request 7
5362	5362	for approval by the Legislative Policy Committee under this section.] 8
5363	5363
5364	5364	[(p)] (N) [An executive agency] THE DEPARTMENT may approve changes to a 9
5365	5365	transaction approved by the Legislative Policy Committee as long as the changes do not 10
5366	5366	materially and adversely affect the overall position of the [executive agency] 11
5367	5367	DEPARTMENT in the transaction or the economic development benefits to be derived by 12
5368	5368	the State in the transaction. 13
5369	5369
5370	5370	[(q)] (O) (1) (i) In this subsection the following words have the meanings 14
5371	5371	indicated. 15
5372	5372
5373	5373	(ii) “Financial assistance” means a grant, loan, or investment 16
5374	5374	provided under this subsection that exceeds $100,000. 17
5375	5375
5376	5376	(iii) “Political subdivision” includes an agency or other 18
5377	5377	instrumentality of the political subdivision. 19
5378	5378
5379	5379	(2) This subsection does not apply to financial assistance used solely for the 20
5380	5380	purpose of acquiring real property or structures on real property. 21
5381	5381
5382	5382	(3) With respect to financial assistance under this section to a political 22
5383	5383	subdivision: 23
5384	5384
5385	5385	(i) if the political subdivision has a program for promoting 24
5386	5386	procurement opportunities among minority businesses that is acceptable to the 25
5387	5387	Department [of Commerce], the political subdivision shall apply the requirements of that 26
5388	5388	program to the procurement of goods or services made with the proceeds from the financial 27
5389	5389	assistance; but 28
5390	5390
5391	5391	(ii) if the political subdivision does not have a program that is 29
5392	5392	acceptable to the Department [of Commerce] under item (i) of this paragraph, the political 30
5393	5393	subdivision is subject to paragraph (4) of this subsection. 31
5394	5394
5395	5395	(4) (i) In this paragraph, “minority business enterprise” has the 32
5396	5396	meaning stated in § 14–301 of this article. 33
5397	5397
5398	5398	(ii) With respect to financial assistance under this section to an 34 HOUSE BILL 498 113
5399	5399
5400	5400
5401	5401	entity other than a political subdivision, the entity shall agree to include in the agreement 1
5402	5402	providing the financial assistance a provision acceptable to the Department of Commerce 2
5403	5403	that would encourage the procurement from minority business enterprises of goods or 3
5404	5404	services purchased with the proceeds from the financial assistance. 4
5405	5405
5406	5406	(iii) In negotiating the provision required under subparagraph (ii) of 5
5407	5407	this paragraph, the Department of Commerce shall take into account relevant factors, 6
5408	5408	including: 7
5409	5409
5410	5410	1. the intended use of the proceeds from the financial 8
5411	5411	assistance; and 9
5412	5412
5413	5413	2. the feasibility of obtaining the required goods or services 10
5414	5414	from minority business enterprises. 11
5415	5415
5416	5416	(5) The Department of Commerce may require that a recipient of financial 12
5417	5417	assistance under this section submit to the Department of Commerce a list, or an updated 13
5418	5418	list, of the minority business enterprises from which goods or services were procured and 14
5419	5419	the nature and dollar amount of the goods or services. 15
5420	5420
5421	5421	[(r) For fiscal years 2019 through 2021, the Governor shall include in the annual 16
5422	5422	budget bill an appropriation of $5,000,000 to the Account to be used by the Department of 17
5423	5423	Commerce to provide conditional loans or grants to companies that meet the following 18
5424	5424	criteria: 19
5425	5425
5426	5426	(1) construction of company headquarters in the State with capital 20
5427	5427	expenditures of at least $500,000,000; and 21
5428	5428
5429	5429	(2) retention of company headquarters in the State with at least 3,250 22
5430	5430	eligible employees, consistent with a letter of intent entered into with the Department of 23
5431	5431	Commerce in October 2016.] 24
5432	5432
5433	5433	Article – State Government 25
5434	5434
5435	5435	9–1A–26. 26
5436	5436
5437	5437	(c) A jackpot won at a video lottery terminal that is not claimed by the winner 27
5438	5438	within 182 days after the jackpot is won shall: 28
5439	5439
5440	5440	(2) be distributed as follows: 29
5441	5441
5442	5442	(i) 2.5% to the [Small, Minority, and Women–Owned Businesses] 30
5443	5443	REINVEST FOR SUCCESS Account established under § 5–1501 of the Economic 31
5444	5444	Development Article; 32
5445	5445
5446	5446	9–1A–27. 33 114 HOUSE BILL 498
5447	5447
5448	5448
5449	5449
5450	5450	(a) Except as provided in subsections (b) and (c) of this section and § 1
5451	5451	9–1A–26(a)(3) of this subtitle, on a properly approved transmittal prepared by the 2
5452	5452	Commission, the Comptroller shall pay the following amounts from the proceeds of video 3
5453	5453	lottery terminals at each video lottery facility: 4
5454	5454
5455	5455	(6) [(i) except as provided in items (ii) and (iii) of this item,] 1.5% to BE 5
5456	5456	DISTRIBUTED EQUALLY BETWEEN THE MARYLAND ECONOMIC INCLUSION FUND 6
5457	5457	ESTABLISHED UNDER § 5–505 OF THE ECONOMIC DEVELOPMENT ARTICLE AND the 7
5458	5458	[Small, Minority, and Women–Owned Businesses] REINVEST FOR SUCCESS Account 8
5459	5459	established under § 5–1501 of the Economic Development Article; 9
5460	5460
5461	5461	[(ii) for fiscal year 2018, 1.5% to the General Fund to pay a portion of 10
5462	5462	the costs of the grants provided under Chapters 6 and 607 of the Acts of the General 11
5463	5463	Assembly of 2017; and 12
5464	5464
5465	5465	(iii) for fiscal years 2019 and 2020, 1.5% to the Education Trust Fund 13
5466	5466	established under § 9–1A–30 of this subtitle;] 14
5467	5467
5468	5468	(c) (1) For the first 10 years of operations at a video lottery facility in Allegany 15
5469	5469	County, on a properly approved transmittal prepared by the Commission, the Comptroller 16
5470	5470	shall pay the following amounts from the proceeds of video lottery terminals at a video 17
5471	5471	lottery facility in Allegany County: 18
5472	5472
5473	5473	(v) 1. except as provided in items 2 and 3 of this item, 0.75% to 19
5474	5474	the [Small, Minority, and Women–Owned Businesses] REINVEST FOR SUCCESS Account 20
5475	5475	established under § 5–1501 of the Economic Development Article; 21
5476	5476
5477	5477	[Subtitle 31. Commerce Subcabinet.] 22
5478	5478
5479	5479	[9–3101. 23
5480	5480
5481	5481	(a) In this subtitle the following words have the meanings indicated. 24
5482	5482
5483	5483	(b) “Secretary” means the Secretary of Commerce. 25
5484	5484
5485	5485	(c) “Subcabinet” means the Commerce Subcabinet.] 26
5486	5486
5487	5487	[9–3102. 27
5488	5488
5489	5489	(a) There is a Commerce Subcabinet. 28
5490	5490
5491	5491	(b) The Subcabinet is composed of the following members: 29
5492	5492
5493	5493	(1) the Secretary, or the Secretary’s designee; 30
5494	5494	HOUSE BILL 498 115
5495	5495
5496	5496
5497	5497	(2) the Secretary of Transportation, or the Secretary’s designee; 1
5498	5498
5499	5499	(3) the Secretary of Labor, or the Secretary’s designee; 2
5500	5500
5501	5501	(4) the Secretary of the Environment, or the Secretary’s designee; 3
5502	5502
5503	5503	(5) the Secretary of Housing and Community Development, or the 4
5504	5504	Secretary’s designee; 5
5505	5505
5506	5506	(6) the Secretary of Planning, or the Secretary’s designee; and 6
5507	5507
5508	5508	(7) the Special Secretary of Minority Affairs, or the Special Secretary’s 7
5509	5509	designee.] 8
5510	5510
5511	5511	[9–3103. 9
5512	5512
5513	5513	The Subcabinet shall: 10
5514	5514
5515	5515	(1) advise the Governor on proposals to enhance the State’s business 11
5516	5516	climate; 12
5517	5517
5518	5518	(2) gather information the Subcabinet considers necessary to promote the 13
5519	5519	goals of the Subcabinet; 14
5520	5520
5521	5521	(3) collaborate to facilitate and expedite critical economic development 15
5522	5522	projects in the State; and 16
5523	5523
5524	5524	(4) provide other assistance that may be required to further the goals of 17
5525	5525	the Subcabinet and enhance the State’s business climate.] 18
5526	5526
5527	5527	[9–3104. 19
5528	5528
5529	5529	(a) The Secretary shall: 20
5530	5530
5531	5531	(1) chair the Subcabinet; 21
5532	5532
5533	5533	(2) convene the meetings of the Subcabinet; and 22
5534	5534
5535	5535	(3) be responsible for the oversight, direction, and accountability of the 23
5536	5536	work of the Subcabinet. 24
5537	5537
5538	5538	(b) The Office of the Secretary of Commerce shall provide the primary staff 25
5539	5539	support for the Subcabinet. 26
5540	5540
5541	5541	(c) The Subcabinet shall meet each month.] 27
5542	5542	116 HOUSE BILL 498
5543	5543
5544	5544
5545	5545	Article – Tax – Property 1
5546	5546
5547	5547	9–103.1. 2
5548	5548
5549	5549	(a) (1) In this section the following words have the meanings indicated. 3
5550	5550
5551	5551	(7) “RISE zone” has the meaning stated in [§ 5–1401] § 10–137 of the 4
5552	5552	Economic Development Article. 5
5553	5553
5554	5554	(c) (6) (i) If a RISE zone is renewed as provided under [§ 5–1404] § 6
5555	5555	10–140 of the Economic Development Article, the governing body of a county or municipal 7
5556	5556	corporation shall calculate the amount of the tax credit under this section equal to at least 8
5557	5557	10% of the amount of property tax imposed on the eligible assessment of the qualified 9
5558	5558	property for the sixth through tenth taxable years. 10
5559	5559
5560	5560	(e) When a Regional Institution Strategic Enterprise zone is designated by the 11
5561	5561	[Secretary of Commerce] MARYLAND ECONOMIC DEVELOPMENT CORPORATION , the 12
5562	5562	[Secretary] CORPORATION shall certify to the State Department of Assessments and 13
5563	5563	Taxation: 14
5564	5564
5565	5565	(1) the real properties in the zone that are qualified properties for each 15
5566	5566	taxable year for which the property tax credit under this section is to be granted; and 16
5567	5567
5568	5568	(2) the date that the real properties became qualified properties. 17
5569	5569
5570	5570	(f) Before property tax bills are sent, the State Department of Assessments and 18
5571	5571	Taxation shall submit to the [Secretary of Commerce] MARYLAND ECONOMIC 19
5572	5572	DEVELOPMENT CORPORATION a list containing: 20
5573	5573
5574	5574	(1) the location of each qualified property; 21
5575	5575
5576	5576	(2) the amount of the base year value for each qualified property; and 22
5577	5577
5578	5578	(3) the amount of the eligible assessment for each qualified property. 23
5579	5579
5580	5580	9–229. 24
5581	5581
5582	5582	(c) For each of the 5 taxable years immediately following the first revaluation of 25
5583	5583	the property after completion of a voluntary cleanup or corrective action plan of a 26
5584	5584	brownfields site, each participating taxing jurisdiction where a qualified brownfields site is 27
5585	5585	located shall: 28
5586	5586
5587	5587	(2) contribute to the Maryland Economic [Development Assistance] 29
5588	5588	COMPETITIVENESS Fund under § 5–313(8) of the Economic Development Article, 30% of 30
5589	5589	the property tax attributable to the increase in the assessment of the brownfields site, 31
5590	5590	including improvements added to the site within the 5–year period as provided under this 32 HOUSE BILL 498 117
5591	5591
5592	5592
5593	5593	subsection, over the assessment of the qualified brownfields site before the voluntary 1
5594	5594	cleanup. 2
5595	5595
5596	5596	(g) A taxing jurisdiction’s contribution for each qualified brownfields site to the 3
5597	5597	Maryland Economic [Development Assistance] COMPETITIVENESS Fund under 4
5598	5598	subsection (c)(2) of this section shall be used only for brownfields sites in the taxing 5
5599	5599	jurisdictions that have enacted a brownfields property tax credit ordinance. 6
5600	5600
5601	5601	Chapter 430 of the Acts of 2023 7
5602	5602
5603	5603	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 8
5604	5604	1, 2023. It shall remain effective for a period of [4] 7 years and, at the end of June 30, 9
5605	5605	[2027] 2030, this Act, with no further action required by the General Assembly, shall be 10
5606	5606	abrogated and of no further force and effect. 11
5607	5607
5608	5608	Chapter 431 of the Acts of 2023 12
5609	5609
5610	5610	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 13
5611	5611	1, 2023. It shall remain effective for a period of [4] 7 years and, at the end of June 30, 14
5612	5612	[2027] 2030, this Act, with no further action required by the General Assembly, shall be 15
5613	5613	abrogated and of no further force and effect. 16
5614	5614
5615	5615	SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 17
5616	5616	as follows: 18
5617	5617
5618	5618	Article – Economic Development 19
5619	5619
5620	5620	6–309. 20
5621	5621
5622	5622	(a) Subject to subsection (b) of this section, this subtitle and the tax credit 21
5623	5623	authorized under it shall terminate on January 1, [2027] 2026. 22
5624	5624
5625	5625	(b) After termination of this subtitle: 23
5626	5626
5627	5627	(1) a business entity may be considered for eligibility for the tax credit 24
5628	5628	authorized under this subtitle based on positions filled before termination of this subtitle, 25
5629	5629	provided that the other requirements of the subtitle are satisfied; and 26
5630	5630
5631	5631	(2) tax credits earned may be carried forward and are subject to recapture 27
5632	5632	in accordance with § 6–305 of this subtitle. 28
5633	5633
5634	5634	6–407. 29
5635	5635
5636	5636	(A) THIS SUBTITLE AND THE TAX CREDIT AUTHORIZE D UNDER IT SHALL 30
5637	5637	TERMINATE ON JANUARY 1, 2026. 31
5638	5638	118 HOUSE BILL 498
5639	5639
5640	5640
5641	5641	(B) AFTER THE TERMINATION OF THIS SUBTITLE , TAX CREDITS EARNED 1
5642	5642	MAY BE CARRIED FORWA RD IN ACCORDANCE WIT H § 6–403 OF THIS SUBTITLE. 2
5643	5643
5644	5644	6–1007. 3
5645	5645
5646	5646	(a) In this section, “investment”, “qualified investor”, and “qualified Maryland 4
5647	5647	technology company” have the meanings stated in § 10–733 of the Tax – General Article. 5
5648	5648
5649	5649	(b) For a qualified opportunity fund that is a qualified investor in a qualified 6
5650	5650	Maryland technology company under § 10–733 of the Tax – General Article, if the qualified 7
5651	5651	Maryland technology company, on or after March 1, 2018, is newly established in or 8
5652	5652	expands into an opportunity zone [in a county other than Allegany County, Dorchester 9
5653	5653	County, Garrett County, or Somerset County]: 10
5654	5654
5655	5655	(1) the Level 1 opportunity zone enhancement is [33%] 65% of the 11
5656	5656	investment in a qualified Maryland technology company, not to exceed [$300,000] 12
5657	5657	$575,000; and 13
5658	5658
5659	5659	(2) the Level 2 opportunity zone enhancement is [50%] 75% of the 14
5660	5660	investment in the qualified Maryland technology company, not to exceed [$500,000] 15
5661	5661	$750,000. 16
5662	5662
5663	5663	(c) The enhanced tax credit percentages and maximums authorized under 17
5664	5664	subsection (b) of this section are in substitution for and not in addition to the percentages 18
5665	5665	and maximums under § 10–733(d) of the Tax – General Article. 19
5666	5666
5667	5667	Article – Housing and Community Development 20
5668	5668
5669	5669	6–404. 21
5670	5670
5671	5671	(a) (1) For a contribution worth $500 or more in goods, money, or real property 22
5672	5672	to an approved project, a business entity or an individual is entitled to a tax credit in the 23
5673	5673	amount determined under subsection (b) of this section. 24
5674	5674
5675	5675	(2) No part of a tax credit under this section may be taken more than once. 25
5676	5676
5677	5677	(b) (1) Except as provided in [paragraph (2)] PARAGRAPHS (2) AND (3) of 26
5678	5678	this subsection, the credit allowed to a business entity or an individual under this section 27
5679	5679	equals 50% of the amount of contributions: 28
5680	5680
5681	5681	(i) that the Department approves under subsection (c) of this 29
5682	5682	section; and 30
5683	5683
5684	5684	(ii) that were made during the taxable year for which the credit is 31
5685	5685	claimed. 32
5686	5686	HOUSE BILL 498 119
5687	5687
5688	5688
5689	5689	(2) IF THE APPROVED PROJE CT OR BUSINESS ENTIT Y IS LOCATED 1
5690	5690	WITHIN A REGIONAL INSTITUTION STRATEGIC ENTERPRISE ZONE DESIG NATED 2
5691	5691	UNDER TITLE 10, SUBTITLE 1 OF THE ECONOMIC DEVELOPMENT ARTICLE OR A 3
5692	5692	RISE ZONE CATCHMENT AREA , AS DEFINED UNDER § 4–509 OF THIS ARTICLE, THE 4
5693	5693	TAX CREDIT ALLOWED T O A BUSINESS ENTITY OR AN INDIVIDUAL UND ER THIS 5
5694	5694	SECTION EQUALS 60% OF THE AMOUNT OF THE CONTRIBUTIONS DESCRI BED UNDER 6
5695	5695	PARAGRAPH (1) OF THIS SUBSECTION. 7
5696	5696
5697	5697	[(2)] (3) The credit allowed under this section for any taxable year may 8
5698	5698	not exceed the lesser of: 9
5699	5699
5700	5700	(i) $250,000; and 10
5701	5701
5702	5702	(ii) the total amount of tax otherwise payable by the business entity 11
5703	5703	or individual for the taxable year. 12
5704	5704
5705	5705	[(3)] (4) Any excess credit that would be allowed but for the limits of 13
5706	5706	paragraph [(2)] (3) of this subsection may be carried over and applied as a credit for up to 14
5707	5707	5 taxable years after the taxable year in which the contribution was made, until the full 15
5708	5708	amount of the excess is used. 16
5709	5709
5710	5710	(c) (1) To qualify for a credit for a contribution under this section, before 17
5711	5711	making a contribution, a business entity or an individual shall apply for and receive 18
5712	5712	approval of the contribution from the Department. 19
5713	5713
5714	5714	(2) Each application for approval of a contribution shall contain: 20
5715	5715
5716	5716	(i) the name of the approved project to which the contribution will 21
5717	5717	be made; 22
5718	5718
5719	5719	(ii) the amount of the contribution; and 23
5720	5720
5721	5721	(iii) a certification by an independent and unrelated third party as to 24
5722	5722	the value of any nonmonetary contribution included or, for new goods, an invoice or receipt 25
5723	5723	certifying the contribution’s net cost to the business entity or individual. 26
5724	5724
5725	5725	(3) The Department may not approve an application if it determines that: 27
5726	5726
5727	5727	(i) the maximum amount of contributions eligible for a tax credit for 28
5728	5728	the project for the fiscal year will be exceeded by the sum of: 29
5729	5729
5730	5730	1. the amount of the proposed contribution; and 30
5731	5731
5732	5732	2. the total amount of contributions previously approved for 31
5733	5733	that project for the fiscal year; or 32
5734	5734	120 HOUSE BILL 498
5735	5735
5736	5736
5737	5737	(ii) the applicant has overstated the value of a nonmonetary 1
5738	5738	contribution. 2
5739	5739
5740	5740	(4) On or before January 31 of each year, the Department shall report to 3
5741	5741	the Department of Assessments and Taxation, the Comptroller, and the Maryla nd 4
5742	5742	Insurance Administration the contributions that the Department has approved under this 5
5743	5743	section in the preceding calendar year. 6
5744	5744
5745	5745	Article – Tax – General 7
5746	5746
5747	5747	10–702. 8
5748	5748
5749	5749	(a) (1) In this section the following words have the meanings indicated. 9
5750	5750
5751	5751	(4) (ii) “Enterprise zone” includes a Regional Institution Strategic 10
5752	5752	Enterprise zone established under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the 11
5753	5753	Economic Development Article. 12
5754	5754
5755	5755	10–721. 13
5756	5756
5757	5757	(a) (1) In this section the following words have the meanings indicated. 14
5758	5758
5759	5759	(2) “Department” means the Department of Commerce. 15
5760	5760
5761	5761	(3) “Maryland base amount” means the base amount as defined in § 41(c) 16
5762	5762	of the Internal Revenue Code that is attributable to Maryland, determined by: 17
5763	5763
5764	5764	(i) substituting “Maryland qualified research and development 18
5765	5765	expense” for “qualified research expense”; 19
5766	5766
5767	5767	(ii) substituting “Maryland qualified research and development” for 20
5768	5768	“qualified research”; and 21
5769	5769
5770	5770	(iii) using, instead of the “fixed base percentage”: 22
5771	5771
5772	5772	1. the percentage that the Maryland qualified research and 23
5773	5773	development expense for the 4 taxable years immediately preceding the taxable year in 24
5774	5774	which the expense is incurred is of the gross receipts for those years; or 25
5775	5775
5776	5776	2. for a taxpayer who has fewer than 4 but at least 1 prior 26
5777	5777	taxable year, the percentage as determined under item 1 of this item, determined using the 27
5778	5778	number of immediately preceding taxable years that the taxpayer has. 28
5779	5779
5780	5780	(4) “Maryland gross receipts” means gross receipts that are reasonably 29
5781	5781	attributable to the conduct of a trade or business in this State, determined under methods 30
5782	5782	prescribed by the Comptroller based on standards similar to the standards under § 10–402 31
5783	5783	of this title. 32 HOUSE BILL 498 121
5784	5784
5785	5785
5786	5786
5787	5787	(5) “Maryland qualified research and development” means qualified 1
5788	5788	research as defined in § 41(d) of the Internal Revenue Code that is conducted in this State 2
5789	5789	IN THE SECTORS INCLU DED ON THE LIST ESTA BLISHED BY THE DEPARTMENT IN 3
5790	5790	ACCORDANCE WITH § 2.5–106 OF THE ECONOMIC DEVELOPMENT ARTICLE. 4
5791	5791
5792	5792	(6) “Maryland qualified research and development expenses” means 5
5793	5793	qualified research expenses as defined in § 41(b) of the Internal Revenue Code incurred for 6
5794	5794	Maryland qualified research and development. 7
5795	5795
5796	5796	(7) “Net book value assets” means the total of a business’s net value of 8
5797	5797	assets, including intangibles but not including liabilities, minus depreciation and 9
5798	5798	amortization. 10
5799	5799
5800	5800	(8) “Small business” means a for–profit corporation, limited liability 11
5801	5801	company, partnership, or sole proprietorship with net book value assets totaling, at the 12
5802	5802	beginning or the end of the taxable year for which Maryland qualified research and 13
5803	5803	development expenses are incurred, as reported on the balance sheet, less than $5,000,000. 14
5804	5804
5805	5805	(b) (1) The purpose of the Research and Development Tax Credit Program is 15
5806	5806	to foster increased research activities and expenditures WITHIN TARGET INDUST RIES 16
5807	5807	AND SECTORS in Maryland. 17
5808	5808
5809	5809	(2) Subject to the limitations of this section, an individual or a corporation 18
5810	5810	may claim credits against the State income tax in an amount equal to 10% of the amount 19
5811	5811	by which the Maryland qualified research and development expenses paid or incurred by 20
5812	5812	the individual or corporation during the taxable year exceed the Maryland base amount for 21
5813	5813	the individual or corporation. 22
5814	5814
5815	5815	(c) (1) By November 15 of the calendar year following the end of the taxable 23
5816	5816	year in which the Maryland qualified research and development expenses were incurred, 24
5817	5817	an individual or corporation shall submit an application to the Department for the credits 25
5818	5818	allowed under subsection (b) of this section. 26
5819	5819
5820	5820	(2) For each calendar year, the total amount of credits approved by the 27
5821	5821	Department under subsection (b) of this section may not exceed $12,000,000. 28
5822	5822
5823	5823	(3) (i) Except as provided in paragraph (5) of this subsection, each 29
5824	5824	calendar year, the Department shall reserve $3,500,000 of the credits authorized under 30
5825	5825	subsection (b) of this section for applicants that are small businesses. 31
5826	5826
5827	5827	(ii) Subject to paragraph (5) of this subsection, if the total amount of 32
5828	5828	credits applied for by all small businesses under this section exceeds the amount specified 33
5829	5829	under subparagraph (i) of this paragraph, the Department shall approve a credit for each 34
5830	5830	applicant in an amount equal to the product of multiplying the credit applied for by the 35
5831	5831	applicant times a fraction: 36
5832	5832	122 HOUSE BILL 498
5833	5833
5834	5834
5835	5835	1. the numerator of which is the amount specified under 1
5836	5836	subparagraph (i) of this paragraph; and 2
5837	5837
5838	5838	2. the denominator of which is the total of all credits applied 3
5839	5839	for by all small businesses under this section in the calendar year. 4
5840	5840
5841	5841	(4) (i) Except as provided in paragraph (5) of this subsection, for each 5
5842	5842	calendar year, the total amount of credits approved by the Department under this section 6
5843	5843	to applicants that are not small businesses may not exceed $8,500,000. 7
5844	5844
5845	5845	(ii) Subject to paragraph (5) of this subsection, if the total amount of 8
5846	5846	credits applied for by all applicants that are not small businesses exceeds the maximum 9
5847	5847	specified under subparagraph (i) of this paragraph, the Department shall approve a credit 10
5848	5848	under this section for each applicant in an amount equal to the product of multiplying the 11
5849	5849	credit applied for by the applicant times a fraction: 12
5850	5850
5851	5851	1. the numerator of which is the maximum specified under 13
5852	5852	subparagraph (i) of this paragraph; and 14
5853	5853
5854	5854	2. the denominator of which is the total of all credits applied 15
5855	5855	for by all applicants that are not small businesses in the calendar year. 16
5856	5856
5857	5857	(5) (i) For any calendar year, if the total amount of credits applied for 17
5858	5858	by all small businesses is less than $3,500,000, the amount specified under paragraph (4)(i) 18
5859	5859	of this subsection shall be increased for that calendar year by an amount equal to the 19
5860	5860	difference between $3,500,000 and the total amount of credits applied for by small 20
5861	5861	businesses. 21
5862	5862
5863	5863	(ii) For any calendar year, if the total amount of credits applied for 22
5864	5864	by all applicants that are not small businesses is less than $8,500,000, the amount specified 23
5865	5865	under paragraph (3)(i) of this subsection shall be increased for that calendar year by an 24
5866	5866	amount equal to the difference between $8,500,000 and the total amount of credits applied 25
5867	5867	for by applicants that are not small businesses. 26
5868	5868
5869	5869	(6) The Department may not approve a tax credit for any single applicant 27
5870	5870	in an amount exceeding $250,000. 28
5871	5871
5872	5872	(7) By February 15 of the calendar year following the end of the year in 29
5873	5873	which the individual or corporation submitted an application for the credit in accordance 30
5874	5874	with paragraph (1) of this subsection, the Department shall certify to the individual or 31
5875	5875	corporation the amount of the research and development tax credits approved by the 32
5876	5876	Department for the individual or corporation under this section. 33
5877	5877
5878	5878	(8) To claim the approved credits allowed under this section, an individual 34
5879	5879	or corporation shall: 35
5880	5880
5881	5881	(i) 1. file an amended income tax return for the taxable year in 36 HOUSE BILL 498 123
5882	5882
5883	5883
5884	5884	which the Maryland qualified research and development expense was incurred; and 1
5885	5885
5886	5886	2. attach a copy of the Department’s certification of the 2
5887	5887	approved credit amount to the amended income tax return; or 3
5888	5888
5889	5889	(ii) subject to subsection (d) of this section, attach a copy of the 4
5890	5890	Department’s certification of the approved credit amount to an income tax return filed for 5
5891	5891	any of the 7 taxable years after the taxable year in which the Maryland qualified research 6
5892	5892	and development expenses were incurred. 7
5893	5893
5894	5894	(d) (1) Except as provided in paragraph (2) of this subsection, if the credit 8
5895	5895	allowed under this section in any taxable year exceeds the State income tax for that taxable 9
5896	5896	year, an individual or corporation may apply the excess as a credit against the State income 10
5897	5897	tax for succeeding taxable years until the earlier of: 11
5898	5898
5899	5899	(i) the full amount of the excess is used; or 12
5900	5900
5901	5901	(ii) the expiration of the 7th taxable year after the taxable year in 13
5902	5902	which the Maryland qualified research and development expense was incurred. 14
5903	5903
5904	5904	(2) If the credit allowed under this section in any taxable year exceeds the 15
5905	5905	State income tax for that taxable year, a small business may claim a refund in the amount 16
5906	5906	of the excess. 17
5907	5907
5908	5908	(e) (1) In determining the amount of the credit under this section: 18
5909	5909
5910	5910	(i) all members of the same controlled group of corporations, as 19
5911	5911	defined under § 41(f) of the Internal Revenue Code, shall be treated as a single taxpayer; 20
5912	5912	and 21
5913	5913
5914	5914	(ii) the credit allowable by this section to each member shall be its 22
5915	5915	proportionate shares of the qualified research expenses giving rise to the credit. 23
5916	5916
5917	5917	(2) The Comptroller shall adopt regulations providing for: 24
5918	5918
5919	5919	(i) determination of the amount of the credit under this section in 25
5920	5920	the case of trades or businesses, whether or not incorporated, that are under common 26
5921	5921	control; 27
5922	5922
5923	5923	(ii) pass–through and allocation of the credit in the case of estates 28
5924	5924	and trusts, partnerships, unincorporated trades or businesses, and S corporations; 29
5925	5925
5926	5926	(iii) adjustments in the case of acquisitions and dispositions 30
5927	5927	described in § 41(f)(3) of the Internal Revenue Code; and 31
5928	5928
5929	5929	(iv) determination of the credit in the case of short taxable years. 32
5930	5930	124 HOUSE BILL 498
5931	5931
5932	5932
5933	5933	(3) The regulations adopted under paragraph (2) of this subsection shall be 1
5934	5934	based on principles similar to the principles applicable under § 41 of the Internal Revenue 2
5935	5935	Code and regulations adopted thereunder. 3
5936	5936
5937	5937	(f) (1) The Department of Commerce and the Comptroller jointly shall adopt 4
5938	5938	regulations to prescribe standards for determining when research or development is 5
5939	5939	considered conducted in the State for purposes of determining the credit under this section. 6
5940	5940
5941	5941	(2) In adopting regulations under this subsection, the Department and the 7
5942	5942	Comptroller may consider: 8
5943	5943
5944	5944	(i) the location where services are performed; 9
5945	5945
5946	5946	(ii) the residence or business location of the person or persons 10
5947	5947	performing services; 11
5948	5948
5949	5949	(iii) the location where supplies used in research and development 12
5950	5950	are consumed; and 13
5951	5951
5952	5952	(iv) any other factors that the Department determines are relevant 14
5953	5953	for the determination. 15
5954	5954
5955	5955	(g) In accordance with § 2.5–109 of the Economic Development Article, the 16
5956	5956	Department shall report on the credits approved under this section. 17
5957	5957
5958	5958	(h) If the provisions of § 41 of the Internal Revenue Code governing the federal 18
5959	5959	research and development tax credit are repealed or terminate, the provisions of this 19
5960	5960	section continue to operate as if the provisions of § 41 of the Internal Revenue Code remain 20
5961	5961	in effect, and the Maryland research and development tax credit under this section shall 21
5962	5962	continue to be available. 22
5963	5963
5964	5964	(I) (1) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS 23
5965	5965	SECTION FOR A TAXABL E YEAR BEGINNING AFT ER DECEMBER 31, 2030. 24
5966	5966
5967	5967	(2) IF A TAXPAYER’S TAXABLE YEAR FOR I NCOME TAX PU RPOSES IS 25
5968	5968	NOT THE CALENDAR YEA R, FOR THE TAXABLE YEAR THAT BEGINS IN CALEN DAR 26
5969	5969	YEAR 2030, THE TAXPAYER MAY APP LY FOR ONLY A PRORAT ED CREDIT FOR 27
5970	5970	RESEARCH AND DEVELOP MENT EXPENSES PAID O R INCURRED IN THE TA XABLE 28
5971	5971	YEAR FOR THAT PART O F THE TAXABLE YEAR T HAT FALLS IN CALENDAR YEAR 2030. 29
5972	5972
5973	5973	10–725. 30
5974	5974
5975	5975	(a) (1) In this section the following words have the meanings indicated. 31
5976	5976
5977	5977	(2) “Biotechnology company” means a company organized for profit that is 32
5978	5978	primarily engaged in, or within 2 months will be primarily engaged in, the research, 33 HOUSE BILL 498 125
5979	5979
5980	5980
5981	5981	development, or commercialization of innovative and proprietary technology that 1
5982	5982	comprises, interacts with, or analyzes biological material including biomolecules (DNA, 2
5983	5983	RNA, or protein), cells, tissues, or organs. 3
5984	5984
5985	5985	(3) (i) “Company” means any entity of any form duly organized and 4
5986	5986	existing under the laws of any jurisdiction for the purpose of conducting business for profit. 5
5987	5987
5988	5988	(ii) “Company” does not include a sole proprietorship. 6
5989	5989
5990	5990	(4) “Department” means the Department of Commerce. 7
5991	5991
5992	5992	(5) (i) “Investment” means the contribution of money in cash or cash 8
5993	5993	equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 9
5994	5994	biotechnology company in exchange for stock, a partnership or membership interest, or 10
5995	5995	other ownership interest in the equity of the qualified Maryland biotechnology company, 11
5996	5996	title to which ownership interest shall vest in the qualified investor. 12
5997	5997
5998	5998	(ii) “Investment” does not include debt. 13
5999	5999
6000	6000	(iii) For purposes of this section, an investment is at risk of loss when 14
6001	6001	its repayment entirely depends upon the success of the business operations of the qualified 15
6002	6002	company. 16
6003	6003
6004	6004	(6) (i) “Qualified investor” means any individual or entity that invests 17
6005	6005	at least $25,000 in a qualified Maryland biotechnology company and that is required to file 18
6006	6006	an income tax return in any jurisdiction. 19
6007	6007
6008	6008	(ii) “Qualified investor” does not include: 20
6009	6009
6010	6010	1. a qualified pension plan, individual retirement account, or 21
6011	6011	other qualified retirement plan under the Employee Retirement Income Security Act of 22
6012	6012	1974, as amended, or fiduciaries or custodians under such plans, or similar tax–favored 23
6013	6013	plans or entities under the laws of other countries; or 24
6014	6014
6015	6015	2. a founder or current employee of the qualified Maryland 25
6016	6016	biotechnology company, if the company has been in active business for more than 5 years. 26
6017	6017
6018	6018	(7) (i) “Qualified Maryland biotechnology company” means a 27
6019	6019	biotechnology company that: 28
6020	6020
6021	6021	1. has its headquarters and base of operations in this State; 29
6022	6022
6023	6023	2. has fewer than 50 full–time employees; 30
6024	6024
6025	6025	3. has been in active business no longer than 12 years; 31
6026	6026
6027	6027	4. does not have its securities publicly traded on any 32 126 HOUSE BILL 498
6028	6028
6029	6029
6030	6030	exchange; 1
6031	6031
6032	6032	5. has been certified as a biotechnology company by the 2
6033	6033	Department; and 3
6034	6034
6035	6035	6. the qualified investors in the company have not received 4
6036	6036	more than $7,000,000 in tax credits in the aggregate under this section. 5
6037	6037
6038	6038	(ii) “Qualified Maryland biotechnology company” includes a 6
6039	6039	company that, within 2 months of the receipt of the investment, has met the requirements 7
6040	6040	of subparagraph (i) of this paragraph. 8
6041	6041
6042	6042	(8) “Secretary” means the Secretary of Commerce. 9
6043	6043
6044	6044	(b) (2) Subject to paragraphs (3) and (4) of this subsection and subsections (d) 10
6045	6045	and (e) of this section, for the taxable year in which an investment in a qualified Maryland 11
6046	6046	biotechnology company is made, a qualified investor may claim a credit against the State 12
6047	6047	income tax in an amount equal to the amount of tax credit stated in the final credit 13
6048	6048	certificate approved by the Secretary for the investment as provided under this section. 14
6049	6049
6050	6050	(5) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A CREDIT 15
6051	6051	UNDER PARAGRAPH (2) OF THIS SUBSECTION I S A PASS–THROUGH ENTITY THAT 16
6052	6052	PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 17
6053	6053	ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 18
6054	6054	CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 19
6055	6055	ENTITY IN ANY MANNER . 20
6056	6056
6057	6057	(d) (1) The tax credit allowed in an initial tax credit certificate issued under 21
6058	6058	this section is: 22
6059	6059
6060	6060	(i) except as provided in item (ii) of this paragraph, 33% of the 23
6061	6061	investment in a qualified Maryland biotechnology company, not to exceed $250,000; or 24
6062	6062
6063	6063	(ii) [50%] 75% of the investment in the qualified Maryland 25
6064	6064	biotechnology company, not to exceed [$500,000] $750,000, if a qualified Maryland 26
6065	6065	biotechnology company[: 27
6066	6066
6067	6067	1. is located in Allegany County, Dorchester County, Garrett 28
6068	6068	County, or Somerset County; or 29
6069	6069
6070	6070	2.] is located in a Regional Institution Strategic Enterprise 30
6071	6071	zone that is designated under Title 5, Subtitle 14 of the Economic Development Article[, is 31
6072	6072	based on technology that was developed at a qualified institution within that zone, and has 32
6073	6073	been in active business not longer than 7 years]. 33
6074	6074
6075	6075	(2) During any fiscal year, the Secretary may not certify eligibility for tax 34 HOUSE BILL 498 127
6076	6076
6077	6077
6078	6078	credits for investments in a single qualified Maryland biotechnology company that in the 1
6079	6079	aggregate exceed 10% of the total appropriations to the Maryland Biotechnology 2
6080	6080	Investment Tax Credit Reserve Fund for that fiscal year. 3
6081	6081
6082	6082	(3) (I) If the tax credit allowed under this section in any taxable year 4
6083	6083	exceeds the total tax otherwise payable by the qualified investor for that taxable year, the 5
6084	6084	qualified investor may claim a refund in the amount of the excess. 6
6085	6085
6086	6086	(II) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A REFUND 7
6087	6087	UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT 8
6088	6088	PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEHALF OF 9
6089	6089	ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 10
6090	6090	CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE 11
6091	6091	PASS–THROUGH ENTITY IN AN Y MANNER. 12
6092	6092
6093	6093	10–730. 13
6094	6094
6095	6095	(a) (1) In this section the following words have the meanings indicated. 14
6096	6096
6097	6097	(4) (i) “Film production activity” means: 15
6098	6098
6099	6099	1. the production of a film or video project that is intended 16
6100	6100	for nationwide commercial distribution; and 17
6101	6101
6102	6102	2. for a television series, each season of the television series. 18
6103	6103
6104	6104	(ii) “Film production activity” includes the production of: 19
6105	6105
6106	6106	1. a feature film; 20
6107	6107
6108	6108	2. a television project; 21
6109	6109
6110	6110	3. a commercial; 22
6111	6111
6112	6112	4. a corporate film; 23
6113	6113
6114	6114	5. a music video; 24
6115	6115
6116	6116	6. a digital animation project; 25
6117	6117
6118	6118	7. a documentary; or 26
6119	6119
6120	6120	8. a talk, reality, or game show. 27
6121	6121
6122	6122	(iii) “Film production activity” does not include the production of: 28
6123	6123	128 HOUSE BILL 498
6124	6124
6125	6125
6126	6126	1. a student film; 1
6127	6127
6128	6128	2. a noncommercial personal video; 2
6129	6129
6130	6130	3. a sports broadcast; 3
6131	6131
6132	6132	4. a broadcast of a live event; 4
6133	6133
6134	6134	5. a video, computer, or social networking game; 5
6135	6135
6136	6136	6. pornography; 6
6137	6137
6138	6138	7. an infomercial; 7
6139	6139
6140	6140	8. a digital product or an animation project other than a 8
6141	6141	digital animation project; or 9
6142	6142
6143	6143	9. a multimedia project. 10
6144	6144
6145	6145	(7) “Qualified film production entity” means an entity that: 11
6146	6146
6147	6147	(i) is carrying out a film production activity; and 12
6148	6148
6149	6149	(ii) the Secretary determines to be eligible for the tax credit under 13
6150	6150	this section in accordance with subsection (c) of this section. 14
6151	6151
6152	6152	(b) (1) A qualified film production entity may claim a credit against the State 15
6153	6153	income tax for film production activities in the State in an amount equal to the amount 16
6154	6154	stated in the final tax credit certificate approved by the Secretary for film production 17
6155	6155	activities. 18
6156	6156
6157	6157	(2) If the tax credit allowed under this section in any taxable year exceeds 19
6158	6158	the total tax otherwise payable by the qualified film production entity for that taxable year, 20
6159	6159	the qualified film production entity may claim a refund in the amount of the excess. 21
6160	6160
6161	6161	(f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 22
6162	6162	may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 23
6163	6163
6164	6164	(i) for fiscal year 2014, $25,000,000; 24
6165	6165
6166	6166	(ii) for fiscal year 2015, $7,500,000; 25
6167	6167
6168	6168	(iii) for fiscal year 2016, $7,500,000; 26
6169	6169
6170	6170	(iv) for fiscal year 2019, $8,000,000; 27
6171	6171
6172	6172	(v) for fiscal year 2020, $11,000,000; 28 HOUSE BILL 498 129
6173	6173
6174	6174
6175	6175
6176	6176	(vi) for fiscal year 2021 through 2023, $12,000,000; 1
6177	6177
6178	6178	(vii) for fiscal year 2024, $15,000,000; 2
6179	6179
6180	6180	(viii) for fiscal year 2025, $17,500,000; AND 3
6181	6181
6182	6182	(ix) for fiscal year 2026 AND EACH FISCAL YEAR THEREAFTER , 4
6183	6183	$20,000,000[; and 5
6184	6184
6185	6185	(x) for fiscal year 2027 and each fiscal year thereafter, $12,000,000]. 6
6186	6186
6187	6187	(2) If the aggregate credit amounts under the tax credit certificates issued 7
6188	6188	by the Secretary total less than the maximum provided under paragraph (1) of this 8
6189	6189	subsection in any fiscal year, any excess amount may be carried forward and issued under 9
6190	6190	tax credit certificates in a subsequent fiscal year. 10
6191	6191
6192	6192	(3) [The Secretary may not issue tax credit certificates for credit amounts 11
6193	6193	totaling more than $10,000,000 in the aggregate for a single film production activity. 12
6194	6194
6195	6195	(4)] (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 13
6196	6196	shall make 10% of the credit amount authorized under paragraph (1) of this subsection 14
6197	6197	available for Maryland small or independent film entities. 15
6198	6198
6199	6199	(ii) If the total amount of credits applied for by Maryland small or 16
6200	6200	independent film entities is less than the amount made available under subparagraph (i) 17
6201	6201	of this paragraph, the Secretary shall make available the unused amount of credits for use 18
6202	6202	by qualified film production entities. 19
6203	6203
6204	6204	[10–732. 20
6205	6205
6206	6206	(a) (1) In this section the following words have the meanings indicated. 21
6207	6207
6208	6208	(2) “Costs” means the costs to an individual or corporation for: 22
6209	6209
6210	6210	(i) security clearance administrative expenses incurred with regard 23
6211	6211	to an employee in the State including, but not limited to: 24
6212	6212
6213	6213	1. processing application requests for clearances for 25
6214	6214	employees in the State; 26
6215	6215
6216	6216	2. maintaining, upgrading, or installing computer systems in 27
6217	6217	the State required to obtain federal security clearances; and 28
6218	6218
6219	6219	3. training employees in the State to administer the 29
6220	6220	application process; and 30 130 HOUSE BILL 498
6221	6221
6222	6222
6223	6223
6224	6224	(ii) construction and equipment costs incurred to construct or 1
6225	6225	renovate a sensitive compartmented information facility (“SCIF”) located in the State as 2
6226	6226	required by the federal government. 3
6227	6227
6228	6228	(3) “Department” means the Department of Commerce. 4
6229	6229
6230	6230	(4) “Secretary” means the Secretary of Commerce. 5
6231	6231
6232	6232	(5) “Small business” has the meaning stated in § 7–218 of this article. 6
6233	6233
6234	6234	(b) (1) Subject to the limitations of this section, for a taxable year beginning 7
6235	6235	after December 31, 2022, but before January 1, 2028, an individual or a corporation that 8
6236	6236	employs not more than 500 employees may claim credits against the State income tax for: 9
6237	6237
6238	6238	(i) security clearance administrative expenses, not to exceed 10
6239	6239	$200,000; 11
6240	6240
6241	6241	(ii) expenses incurred for rental payments owed during the first year 12
6242	6242	of a rental agreement for spaces leased in the State if the individual or corporation is a 13
6243	6243	small business that performs security–based contracting, not to exceed $200,000; and 14
6244	6244
6245	6245	(iii) subject to paragraph (2) of this subsection, construction and 15
6246	6246	equipment costs incurred to construct or renovate a single SCIF in an amount equal to the 16
6247	6247	lesser of 50% of the costs or $200,000. 17
6248	6248
6249	6249	(2) The total amount of construction and equipment costs incurred to 18
6250	6250	construct or renovate multiple SCIFs for which an individual or a corporation is eligible to 19
6251	6251	claim as a credit against the State income tax is $500,000. 20
6252	6252
6253	6253	(c) (1) By September 15 of the calendar year following the end of the taxable 21
6254	6254	year in which the costs were incurred, an individual or a corporation shall submit an 22
6255	6255	application to the Department for the credits allowed under subsection (b) of this section. 23
6256	6256
6257	6257	(2) (i) The total amount of credits approved by the Department under 24
6258	6258	subsection (b) of this section may not exceed $2,000,000 for any calendar year. 25
6259	6259
6260	6260	(ii) If the total amount of credits applied for by all individuals and 26
6261	6261	corporations under subsection (b) of this section exceeds the maximum specified under 27
6262	6262	subparagraph (i) of this paragraph, the Department shall approve a credit under subsection 28
6263	6263	(b) of this section for each applicant in an amount equal to the product of multiplying the 29
6264	6264	credit applied for by the applicant times a fraction: 30
6265	6265
6266	6266	1. the numerator of which is the maximum specified under 31
6267	6267	subparagraph (i) of this paragraph; and 32
6268	6268
6269	6269	2. the denominator of which is the total of all credits applied 33 HOUSE BILL 498 131
6270	6270
6271	6271
6272	6272	for by all applicants under subsection (b) of this section in the calendar year. 1
6273	6273
6274	6274	(3) By December 15 of the calendar year following the end of the taxable 2
6275	6275	year in which the costs were incurred, the Department shall certify to the individual or 3
6276	6276	corporation the amount of tax credits approved by the Department for the individual or 4
6277	6277	corporation under this section. 5
6278	6278
6279	6279	(4) To claim the approved credits allowed under this section, an individual 6
6280	6280	or a corporation shall: 7
6281	6281
6282	6282	(i) 1. file an amended income tax return for the taxable year in 8
6283	6283	which the costs were incurred; and 9
6284	6284
6285	6285	2. attach a copy of the Department’s certification of the 10
6286	6286	approved credit amount to the amended income tax return; or 11
6287	6287
6288	6288	(ii) subject to subsection (d) of this section, attach a copy of the 12
6289	6289	Department’s certification of the approved credit amount to an income tax return filed for 13
6290	6290	any taxable year after the taxable year in which the costs were incurred. 14
6291	6291
6292	6292	(d) If the credit allowed for any taxable year under this section exceeds the total 15
6293	6293	tax otherwise due, an individual or corporation may apply the excess as a credit against 16
6294	6294	the State income tax for succeeding taxable years until the full amount of the excess is 17
6295	6295	used. 18
6296	6296
6297	6297	(e) The Department, in consultation with the Comptroller, shall adopt 19
6298	6298	regulations to carry out the provisions of this section. 20
6299	6299
6300	6300	(f) In accordance with § 2.5–109 of the Economic Development Article, the 21
6301	6301	Department shall submit a report on the number of credits certified in the previous 22
6302	6302	calendar year.] 23
6303	6303
6304	6304	10–733. 24
6305	6305
6306	6306	(a) (1) In this section the following words have the meanings indicated. 25
6307	6307
6308	6308	(2) (i) “Company” means any entity of any form duly organized and 26
6309	6309	existing under the laws of any jurisdiction for the purpose of conducting business for profit. 27
6310	6310
6311	6311	(ii) “Company” includes an entity that becomes duly organized and 28
6312	6312	existing under the laws of any jurisdiction for the purpose of conducting business for profit 29
6313	6313	within 4 months of receiving a qualified investment. 30
6314	6314
6315	6315	(iii) “Company” does not include a sole proprietorship. 31
6316	6316
6317	6317	(3) “Department” means the Department of Commerce. 32
6318	6318	132 HOUSE BILL 498
6319	6319
6320	6320
6321	6321	(4) (i) “Investment” means the contribution of money in cash or cash 1
6322	6322	equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 2
6323	6323	technology company in exchange for stock, a partnership or membership interest, or any 3
6324	6324	other ownership interest in the equity of the qualified Maryland technology company, title 4
6325	6325	to which ownership interest shall vest in the qualified investor. 5
6326	6326
6327	6327	(ii) “Investment” does not include debt unless it is convertible debt. 6
6328	6328
6329	6329	(iii) For purposes of this section, an investment is at risk of loss when 7
6330	6330	repayment entirely depends on the success of the business operations of the qualified 8
6331	6331	company. 9
6332	6332
6333	6333	(5) (i) “Qualified investor” means any individual or entity that invests 10
6334	6334	at least $25,000 in a qualified Maryland technology company and that is required to file an 11
6335	6335	income tax return in any jurisdiction. 12
6336	6336
6337	6337	(ii) “Qualified investor” does not include: 13
6338	6338
6339	6339	1. a qualified pension plan, an individual retirement 14
6340	6340	account, or any other qualified retirement plan under the Employee Retirement Income 15
6341	6341	Security Act of 1974, as amended, or fiduciaries or custodians under such plans, or similar 16
6342	6342	tax–favored plans or entities under the laws of other countries; or 17
6343	6343
6344	6344	2. a founder or current employee of the qualified Maryland 18
6345	6345	technology company, if the company has been in active business for more than 5 years. 19
6346	6346
6347	6347	(6) (i) “Qualified Maryland technology company” means a technology 20
6348	6348	company that has met the criteria set forth in subsection (b)(3) of this section. 21
6349	6349
6350	6350	(ii) “Qualified Maryland technology company” does not include a 22
6351	6351	technology company that is or has been certified as a qualified Maryland biotechnology 23
6352	6352	company under § 10–725 of this subtitle. 24
6353	6353
6354	6354	(7) “Secretary” means the Secretary of Commerce. 25
6355	6355
6356	6356	(8) “Technology company” means a company organized for profit that is 26
6357	6357	engaged in the research, development, or commercialization of innovative and proprietary 27
6358	6358	technology. 28
6359	6359
6360	6360	(b) (2) Subject to paragraph (3) of this subsection and subsections (d) and (e) 29
6361	6361	of this section, for the taxable year in which an investment in a qualified Maryland 30
6362	6362	technology company is made, a qualified investor may claim a credit against the State 31
6363	6363	income tax in an amount equal to the amount of tax credit stated in the final credit 32
6364	6364	certificate approved by the Secretary for the investment as provided under this section. 33
6365	6365
6366	6366	(3) To be eligible for the tax credit described in paragraph (2) of this 34
6367	6367	subsection, the qualified investor: 35 HOUSE BILL 498 133
6368	6368
6369	6369
6370	6370
6371	6371	(ii) at least 30 days prior to making an investment in a qualified 1
6372	6372	Maryland technology company for which the qualified investor would be eligible for an 2
6373	6373	initial tax credit certificate under this subsection, shall submit an application to the 3
6374	6374	Department containing the following: 4
6375	6375
6376	6376	2. evidence that the qualified Maryland technology company 5
6377	6377	has satisfied the following minimum requirements for consideration as a qualified 6
6378	6378	Maryland technology company: 7
6379	6379
6380	6380	J. meets any other reasonable requirements of the 8
6381	6381	Department evidencing that the company is a going concern engaged in the research, 9
6382	6382	development, or commercialization of innovative and proprietary technology in an eligible 10
6383	6383	technology sector identified in accordance with paragraph (4) of this subsection; and 11
6384	6384
6385	6385	(4) (i) [After consulting with the Department and the Maryland 12
6386	6386	Department of Labor, each year the Maryland Economic Development Commission shall: 13
6387	6387
6388	6388	1. evaluate the potential employment and economic growth 14
6389	6389	of Maryland’s technology sectors; and 15
6390	6390
6391	6391	2. recommend eligible technology sectors to the Department. 16
6392	6392
6393	6393	(ii)] Each year the Department shall[: 17
6394	6394
6395	6395	1. consider the recommendation of the Maryland Economic 18
6396	6396	Development Commission; and 19
6397	6397
6398	6398	2.] establish a list of technology sectors that will be eligible 20
6399	6399	for the tax credit under this section. 21
6400	6400
6401	6401	[(iii)] (II) In determining whether a company is engaged in an 22
6402	6402	eligible technology sector, the Department shall consider the definitions set forth in the 23
6403	6403	North American Industry Classification System (NAICS). 24
6404	6404
6405	6405	(5) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A CREDIT 25
6406	6406	UNDER PARAGRAPH (2) OF THIS SUBSECTION I S A PASS–THROUGH ENTITY THAT 26
6407	6407	PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 27
6408	6408	ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 28
6409	6409	CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 29
6410	6410	ENTITY IN ANY MANNER . 30
6411	6411
6412	6412	(d) (1) The tax credit allowed in an initial tax credit certificate issued under 31
6413	6413	this section is: 32
6414	6414
6415	6415	(i) except as provided in item (ii) of this paragraph, 33% of the 33 134 HOUSE BILL 498
6416	6416
6417	6417
6418	6418	investment in a qualified Maryland technology company, not to exceed $250,000; or 1
6419	6419
6420	6420	(ii) [50%] 75% of the investment in the qualified Maryland 2
6421	6421	technology company, not to exceed [$500,000] $750,000, if a qualified Maryland 3
6422	6422	technology company[: 4
6423	6423
6424	6424	1. is located in Allegany County, Dorchester County, Garrett 5
6425	6425	County, or Somerset County; or 6
6426	6426
6427	6427	2.] is located in a Regional Institution Strategic Enterprise 7
6428	6428	zone that is designated under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the Economic 8
6429	6429	Development Article[, is based on technology that was developed at a qualified institution 9
6430	6430	within that zone, and has been in active business not longer than 7 years]. 10
6431	6431
6432	6432	(2) During any fiscal year, the Secretary may not certify eligibility for tax 11
6433	6433	credits for investments in: 12
6434	6434
6435	6435	(i) a single qualified Maryland technology company that in the 13
6436	6436	aggregate exceed 15% of the total appropriations to the Maryland Innovation Investment 14
6437	6437	Tax Credit Reserve Fund for that fiscal year; or 15
6438	6438
6439	6439	(ii) a single technology sector that in the aggregate exceed 25% of the 16
6440	6440	total appropriations to the Maryland Innovation Investment Tax Credit Reserve Fund for 17
6441	6441	that fiscal year. 18
6442	6442
6443	6443	(3) (I) If the credit allowed under this section in any taxable year 19
6444	6444	exceeds the State income tax for that taxable year, an individual or a corporation may claim 20
6445	6445	a refund in the amount of the excess. 21
6446	6446
6447	6447	(II) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A REFUND 22
6448	6448	UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT 23
6449	6449	PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 24
6450	6450	ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 25
6451	6451	CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 26
6452	6452	ENTITY IN ANY MANNER . 27
6453	6453
6454	6454	(J) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS SECTION 28
6455	6455	FOR A TAXABLE YEAR BEGIN NING AFTER DECEMBER 31, 2029. 29
6456	6456
6457	6457	10–733.1. 30
6458	6458
6459	6459	(a) (1) In this section the following words have the meanings indicated. 31
6460	6460
6461	6461	(2) “Cybersecurity business” means an entity organized for profit that is 32
6462	6462	engaged primarily in the development of innovative and proprietary cybersecurity 33
6463	6463	technology or the provision of cybersecurity service. 34 HOUSE BILL 498 135
6464	6464
6465	6465
6466	6466
6467	6467	(3) “Cybersecurity service” means an activity that is associated with a 1
6468	6468	category or subcategory identified under the Framework Core established by the National 2
6469	6469	Institute of Standards and Technology’s Cybersecurity Framework. 3
6470	6470
6471	6471	(4) “Cybersecurity technology” means products or goods intended to detect 4
6472	6472	or prevent activity intended to result in unauthorized access to, exfiltration of, 5
6473	6473	manipulation of, or impairment to the integrity, confidentiality, or availability of an 6
6474	6474	information system or information stored on or transiting an information system. 7
6475	6475
6476	6476	(5) “Department” means the Department of Commerce. 8
6477	6477
6478	6478	(6) [“Panel” means the panel that the Department may establish under 9
6479	6479	subsection (c) of this section composed of experts in the areas of cybersecurity technology 10
6480	6480	and cybersecurity service. 11
6481	6481
6482	6482	(7)] “Qualified buyer” means any entity [that has fewer than 50 employees 12
6483	6483	in the State and] that is required to file an income tax return in the State. 13
6484	6484
6485	6485	[(8)] (7) “Qualified seller” means a cybersecurity business that: 14
6486	6486
6487	6487	(i) has its headquarters and base of operations in the State; 15
6488	6488
6489	6489	(ii) 1. has less than [$5,000,000] $10,000,000 in annual 16
6490	6490	revenue; 17
6491	6491
6492	6492	2. is a minority–owned, woman–owned, veteran–owned, or 18
6493	6493	service–disabled–veteran–owned business; or 19
6494	6494
6495	6495	3. is located in a historically underutilized business zone 20
6496	6496	designated by the United States Small Business Administration; 21
6497	6497
6498	6498	(iii) 1. owns or has properly licensed any proprietary 22
6499	6499	cybersecurity technology; or 23
6500	6500
6501	6501	2. provides a cybersecurity service; 24
6502	6502
6503	6503	(iv) is in good standing; 25
6504	6504
6505	6505	(v) is current in the payment of all tax obligations to the State or any 26
6506	6506	unit or subdivision of the State; and 27
6507	6507
6508	6508	(vi) is not in default under the terms of any contract with, 28
6509	6509	indebtedness to, or grant from the State or any unit or subdivision of the State. 29
6510	6510
6511	6511	(b) (1) THERE IS A BUY MARYLAND CYBERSECURITY TAX CREDIT 30 136 HOUSE BILL 498
6512	6512
6513	6513
6514	6514	AUTHORIZED UNDER THI S SECTION. 1
6515	6515
6516	6516	(2) THE BUY MARYLAND CYBERSECURITY TAX CREDIT IS INTENDED 2
6517	6517	TO PROMOTE THE CYBER SECURITY INDUSTRY IN MARYLAND BY HELPING 3
6518	6518	MARYLAND BUSINESSES A ND NONPROFITS PURCHA SE CYBERSECURITY 4
6519	6519	TECHNOLOGIES AND SER VICES FROM MARYLAND CYBERSECURIT Y COMPANIES TO 5
6520	6520	PROTECT BUSINESS AND CUSTOMER INFORMATION . 6
6521	6521
6522	6522	[(1)] (3) Subject to paragraphs [(2) and (3)] (4) THROUGH (6) of this 7
6523	6523	subsection, a qualified buyer may claim a credit against the State income tax in an amount 8
6524	6524	equal to 50% of the cost incurred during the taxable year to purchase cybersecurity 9
6525	6525	technology or a cybersecurity service from one or more qualified sellers. 10
6526	6526
6527	6527	[(2)] (4) For any taxable year, the credit allowed under this section may 11
6528	6528	not exceed $50,000 for each qualified buyer. 12
6529	6529
6530	6530	(5) IF THE CREDIT ALLOWED UNDER THIS SECTION I N ANY TAXABLE 13
6531	6531	YEAR EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR , A QUALIFIED 14
6532	6532	BUYER MAY CLAIM A RE FUND IN THE AMOUNT O F THE EXCESS. 15
6533	6533
6534	6534	[(3)] (6) For any taxable year, the aggregate credits claimed for 16
6535	6535	cybersecurity technology or cybersecurity service purchased from a single qualified seller 17
6536	6536	may not exceed [$200,000] $1,000,000. 18
6537	6537
6538	6538	(c) [(1) The Department, in consultation with the Maryland Technology 19
6539	6539	Development Corporation, may establish a panel composed of experts in the areas of 20
6540	6540	cybersecurity technology and cybersecurity service. 21
6541	6541
6542	6542	(2) The Department may establish the panel under service contracts with 22
6543	6543	independent reviewers. 23
6544	6544
6545	6545	(3) The panel shall assist the Department in its determination as to 24
6546	6546	whether a company is a qualified seller. 25
6547	6547
6548	6548	(4) A member of the panel is not eligible to receive any benefit, direct or 26
6549	6549	indirect, from the tax credit under this section. 27
6550	6550
6551	6551	(5) (i) Except as provided in subparagraph (ii) of this paragraph, 28
6552	6552	Division II of the State Finance and Procurement Article does not apply to a service that 29
6553	6553	the Department obtains under this section. 30
6554	6554
6555	6555	(ii) The Department is subject to Title 12, Subtitle 4 of the State 31
6556	6556	Finance and Procurement Article for services the Department obtains under this section. 32
6557	6557
6558	6558	(d)] (1) (i) A qualified buyer eligible for the credit under this section may 33 HOUSE BILL 498 137
6559	6559
6560	6560
6561	6561	apply to the Department for a credit certificate that states the amount of the credit the 1
6562	6562	qualified buyer may claim under subsection (b) of this section. 2
6563	6563
6564	6564	(ii) A qualified buyer shall attach the credit certificate to the income 3
6565	6565	tax return on which the qualified buyer claims the credit under subsection (b) of this 4
6566	6566	section. 5
6567	6567
6568	6568	(2) Subject to paragraph (3) of this subsection, the Secretary of Commerce 6
6569	6569	shall approve each application under paragraph (1) of this subsection that qualifies for a 7
6570	6570	credit certificate. 8
6571	6571
6572	6572	(3) [(i)] The total amount of the credit certificates approved by the 9
6573	6573	Secretary of Commerce under this subsection may not exceed: 10
6574	6574
6575	6575	1. for taxable year 2018, $2,000,000; and 11
6576	6576
6577	6577	2. for taxable year 2019 and each taxable year thereafter, 12
6578	6578	$4,000,000. 13
6579	6579
6580	6580	[(ii) For each taxable year, the Secretary of Commerce shall award 14
6581	6581	25% of the amount of tax credits authorized under subparagraph (i) of this paragraph to 15
6582	6582	qualified buyers that purchase cybersecurity services.] 16
6583	6583
6584	6584	[(e)] (D) (1) The Department may revoke its certification of a credit under 17
6585	6585	this section if any representation made in connection with the application for the 18
6586	6586	certification is determined by the Department to have been false. 19
6587	6587
6588	6588	(2) The revocation may be in full or in part as the Department may 20
6589	6589	determine and, subject to paragraph (3) of this subsection, shall be communicated to the 21
6590	6590	qualified buyer and the Comptroller. 22
6591	6591
6592	6592	(3) The qualified buyer shall have an opportunity to appeal any revocation 23
6593	6593	to the Department before notification of the Comptroller. 24
6594	6594
6595	6595	(4) The Comptroller may make an assessment against the qualified buyer 25
6596	6596	to recapture any amount of tax credit that the qualified buyer has already claimed. 26
6597	6597
6598	6598	[(f)] (E) In accordance with § 2.5–109 of the Economic Development Article, the 27
6599	6599	Department shall submit a report on the credit certificates awarded under this section for 28
6600	6600	the calendar year. 29
6601	6601
6602	6602	[(g)] (F) The Department and the Comptroller jointly shall adopt regulations to 30
6603	6603	carry out this section and to specify criteria and procedures for application for, approval of, 31
6604	6604	and monitoring continuing eligibility for the tax credit under this section. 32
6605	6605
6606	6606	(G) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS SECTION 33 138 HOUSE BILL 498
6607	6607
6608	6608
6609	6609	FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2029. 1
6610	6610
6611	6611	Chapter 515 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 2
6612	6612	Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 3
6613	6613	the Acts of 2021 4
6614	6614
6615	6615	SECTION 2. AND BE IT FURTHER ENACTED, That: 5
6616	6616
6617	6617	(a) Except as otherwise provided in this section, this Act shall be applicable to all 6
6618	6618	taxable years beginning after December 31, 1999 [but before January 1, 2026]. 7
6619	6619
6620	6620	(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 8
6621	6621
6622	6622	(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 9
6623	6623	apply for a prorated credit for research and development expenses paid or incurred in the 10
6624	6624	taxable year for that part of the taxable year that falls in calendar year 2000[; and 11
6625	6625
6626	6626	(2) for the taxable year that begins in calendar year 2025, the taxpayer 12
6627	6627	may apply for only a prorated credit for research and development expenses paid or 13
6628	6628	incurred in the taxable year for that part of the taxable year that falls in calendar year 14
6629	6629	2025]. 15
6630	6630
6631	6631	SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 16
6632	6632	1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 17
6633	6633	with no further action required by the General Assembly, this Act shall be abrogated and 18
6634	6634	of no further force and effect.] 19
6635	6635
6636	6636	Chapter 516 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 20
6637	6637	Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 21
6638	6638	the Acts of 2021 22
6639	6639
6640	6640	SECTION 2. AND BE IT FURTHER ENAC TED, That: 23
6641	6641
6642	6642	(a) Except as otherwise provided in this section, this Act shall be applicable to all 24
6643	6643	taxable years beginning after December 31, 1999 [but before January 1, 2026]. 25
6644	6644
6645	6645	(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 26
6646	6646
6647	6647	(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 27
6648	6648	apply for a prorated credit for research and development expenses paid or incurred in the 28
6649	6649	taxable year for that part of the taxable year that falls in calendar year 2000[; and 29
6650	6650
6651	6651	(2) for the taxable year that begins in calendar year 2025, the taxpayer 30
6652	6652	may apply for only a prorated credit for research and development expenses paid or 31
6653	6653	incurred in the taxable year for that part of the taxable year that falls in calendar year 32
6654	6654	2025]. 33 HOUSE BILL 498 139
6655	6655
6656	6656
6657	6657
6658	6658	SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
6659	6659	1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 2
6660	6660	with no further action required by the General Assembly, this Act shall be abrogated and 3
6661	6661	of no further force and effect.] 4
6662	6662
6663	6663	SECTION 4. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 5
6664	6664	as follows: 6
6665	6665
6666	6666	Chapter 390 of the Acts of 2013, as amended by Chapter 578 of the Acts of 2018 7
6667	6667	and Chapter 113 of the Acts of 2021 8
6668	6668
6669	6669	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
6670	6670	1, 2013, and shall be applicable to all taxable years beginning after December 31, 2013[, 10
6671	6671	but before January 1, 2025. This Act shall remain effective for a period of 12 years and, at 11
6672	6672	the end of June 30, 2025, with no further action required by the General Assembly, this Act 12
6673	6673	shall be abrogated and of no further force and effect]. 13
6674	6674
6675	6675	SECTION 5. AND BE IT FURTHER ENACTED, That the terms of the members of 14
6676	6676	the Maryland Life Sciences Advisory Board appointed by the Governor under § 3–203(a)(3) 15
6677	6677	of the Economic Development Article, as enacted by Section 2 of this Act, shall expire as 16
6678	6678	follows: 17
6679	6679
6680	6680	(1) five members in 2026; 18
6681	6681
6682	6682	(2) five members in 2027; and 19
6683	6683
6684	6684	(3) six members in 2028. 20
6685	6685
6686	6686	SECTION 6. AND BE IT FURTHER ENACTED, That the publisher of the 21
6687	6687	Annotated Code of Maryland, in consultation with and subject to the approval of the 22
6688	6688	Department of Legislative Services, shall correct, with no further action required by the 23
6689	6689	General Assembly, cross–references and terminology rendered incorrect by this Act. The 24
6690	6690	publisher shall adequately describe any correction that is made in an editor’s note following 25
6691	6691	the section affected. 26
6692	6692
6693	6693	SECTION 7. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall be 27
6694	6694	applicable to all taxable years beginning after December 31, 2024. 28
6695	6695
6696	6696	SECTION 8. AND BE IT FURTHER ENACTED, That Section 4 of this Act shall take 29
6697	6697	effect June 1, 2025. 30
6698	6698
6699	6699	SECTION 9. AND BE IT FURTHER ENACTED, That, except as provided in Section 31
6700	6700	8 of this Act, this Act shall take effect July 1, 2025. 32
6701	6701